Mieco Chipboard - AR2016 - 28 04 2017

ANNUAL REPORT 2016
CONTENTS
Group Corporate Structure 2
Corporate Information 3
Directors Profile 4
Key Senior Management Profiles 6
Group Managing Directors 7

Statement and Management
Discussion & Analysis
Corporate Social Responsibility 11
Financial Highlights 16
Share Performance 18
Corporate Governance Statement 19
Audit Committee Report 29
Statement On Risk Management 32

And Internal Control
Statement Of Directors Responsibility 35
Financial Statements 36
Analysis Of Shareholdings 113
List Of Properties 116
Notice Of Annual General Meeting 117
Statement Accompanying Notice of 120

Annual General Meeting
Form Of Proxy
GROUP CORPORATE STRUCTURE
AS AT 4 APRIL 2017
100%
Mieco
Manufacturing
Sdn Bhd
100%
Mieco
Marketing
Mieco Chipboard Berhad* 100% Sdn Bhd
Mieco
Chemicals
Sdn Bhd
100%
Mieco
Marketing (S)
100% Pte Ltd
Aspire
Benchmark
Sdn Bhd
100%
Mieco
International
100% (H.K.) Limited
Tudor
Capital
Sdn Bhd
100%
Mieco Wood
Resources
Sdn Bhd
100%
Mieco
Reforestation
* Listed on Bursa Malaysia Securities Berhad Sdn Bhd
2 MIECO CHIPBOARD BERHAD ANNUAL REPORT 2016

CORPORATE INFORMATION
BOARD OF DIRECTORS SECRETARY
Y.A.M. Tengku Puteri Seri Kemala Pahang Ng Geok Lian

Tengku Aishah Binti Sultan Haji Ahmad Shah LS No. 07155
Independent Non-Executive Chairman
Dato Sri Ng Ah Chai REGISTRARS

Group Managing Director
Metra Management Sdn Bhd
Mr. Cheam Tow Yong 30.02, 30th Floor, Menara Multi-Purpose
Independent Non-Executive Director Capital Square
No. 8 Jalan Munshi Abdullah
Dato Abdul Rashid Bin Mat Amin 50100 Kuala Lumpur, Malaysia
Independent Non-Executive Director Tel : 603 - 2698 3232
Fax : 603 - 2698 0313
Mr. Kajendra A/L Pathmanathan
Non-Independent Non-Executive Director
AUDITORS
AUDIT COMMITTEE Messrs Deloitte PLT

(AF0080)
Mr. Cheam Tow Yong (Chairman) Level 16, Menara LGB
Dato Abdul Rashid Bin Mat Amin 1, Jalan Wan Kadir
Y.A.M. Tengku Puteri Seri Kemala Pahang Taman Tun Dr Ismail
Tengku Aishah Binti Sultan Haji Ahmad Shah 60000 Kuala Lumpur
NOMINATION COMMITTEE BANKERS
Dato Abdul Rashid Bin Mat Amin (Chairman) Alliance Bank Malaysia Berhad
Mr. Cheam Tow Yong OCBC Bank (Malaysia) Berhad
Y.A.M. Tengku Puteri Seri Kemala Pahang Malayan Banking Berhad
Tengku Aishah Binti Sultan Haji Ahmad Shah
BURSA MALAYSIA STOCK NUMBER

REMUNERATION COMMITTEE
MIECO 5001
Dato Abdul Rashid Bin Mat Amin (Chairman)
Mr. Cheam Tow Yong
Y.A.M. Tengku Puteri Seri Kemala Pahang INTERNATIONAL SECURITIES
Tengku Aishah Binti Sultan Haji Ahmad Shah IDENTIFICATION NUMBER (ISIN)
MIECO MYL5001OO002
REGISTERED OFFICE
No. 1, Block C, Jalan Indah 2/6 REUTERS CODE

Taman Indah, Batu 11
43200 Cheras, Selangor Darul Ehsan MIEC. KL
Tel : 603 - 9075 9991
Fax : 603 - 9080 7991
MIECO CHIPBOARD BERHAD ANNUAL REPORT 2016 3

DIRECTORS PROFILE
Y.A.M. TENGKU PUTERI SERI KEMALA PAHANG MR. CHEAM TOW YONG
TENGKU AISHAH BINTI SULTAN HAJI AHMAD Independent Non-Executive Director
SHAH Chairman of Audit Committee
Independent Non-Executive Chairman Member of Nomination and Remuneration Committees
Member of Audit, Nomination and Remuneration
Committees Mr. Cheam Tow Yong, aged 61, was appointed to the Board
on 15 November 2016 as an Independent Non-Executive
Y.A.M Tengku Puteri Seri Kemala Pahang Tengku Aishah Director of Mieco Chipboard Berhad.
Binti Sultan Hai Ahmad Shah, aged 59, was appointed
to the Board on 3 January 2017 as Independent Non- Mr. Cheam is a chartered accountant with New Zealand
Executive Chairman of Mieco Chipboard Berhad. Society of Accountants and is a Registered Accountant of
Malaysian Institute of Accountants. Mr. Cheam received a
Y.A.M. Tengku Aishah graduated with a Diploma in Bachelor of Commerce degree from University of Otago,
Business Administration from Dorset Institute, UK in 1980 New Zealand in 1978 and Diploma of International
and has been a Director of TAS Industries Sdn Bhd since Management Study from Sweden Institute of Management
15 August 1990. TAS Industries Sdn Bhd is an investment in 1995.
holding and property development company in Kuala
Lumpur. Mr. Cheam served as financial professional, as accountant,
accounting manager and financial controller to a number
Y.A.M. Tengku Aishah is also an Independent Non- of local and multinational companies from 1979 to 1993.
Executive Chairperson of Inari Amertron Berhad (Formerly He served as Managing Director of Thomson Electronic
known as Inari Berhad) and Chairman of Insas Berhad. Parts Sdn Bhd, a subsidiary of Thomson CSF of France from
1993 to 1999. He served for Tomisho Holdings Berhad
(now known as SYF Resources Bhd) first as Chief Operating
Officer, then as Chief Executive Officer from 1999 to 2003.
DATO SRI NG AH CHAI From 2004 to 2007, he served as Corporate Director of PJI
Group Managing Director Holdings Berhad (now known as YFG Berhad). From 2007
to 2011, he served as Finance Director of a local company
Dato Sri Ng Ah Chai, aged 54, was appointed to the Board which involved in oil and gas EPC contracting business.
on 15 November 2016 as Group Managing Director of
Mieco Chipboard Berhad. Mr. Cheam had also previously served as independent
director of Oil Corp Berhad and Kinsteel Berhad.
Dato Sri Ng has over 30 years of experience in timber
and furniture industries. His involvement in the timber Mr. Cheam is now a director of a local private company.
trade started in 1985 with a sawmilling business. In
1991, he expanded his business into tropical wood
furniture manufacturing for the local market. He ceased
his sawmilling business in 1993 and co-founded Seng
Yip Furniture Sdn Bhd. Under Dato Sri Ngs leadership,
coupled with his extensive background and experience in
timber and furniture business, Seng Yip Furniture Sdn Bhd
has expanded from a kiln drying and timber processing
business into manufacturer of furniture components and
semi-furnished parts in 1995. In 1998, he further ventured
into finished wood furniture business.
Currently, Dato Sri Ng is the Executive Chairman and

Chief Executive Officer of SYF Resources Berhad, a
position he has held since 28 September 2005.

DIRECTORS PROFILE
(Contd)
DATO ABDUL RASHID BIN MAT AMIN MR. KAJENDRA A/L PATHMANATHAN
Independent Non-Executive Director Non-Independent Non-Executive Director
Chairman of Nomination and Remuneration Committees
Member of Audit Committee Mr. Kajendra A/L Pathmanathan, aged 42, was re-
designated as Non-Independent Non-Executive Director
An alumnus of the Malay College Kuala Kangsar, Dato on 30 December 2016 from his position as Executive
Abdul Rashid Bin Mat Amin, aged 66, was appointed Director.
to the Board on 15 November 2016 as an Independent
Non-Executive Director of Mieco Chipboard Berhad. Mr. Kajendra holds a Bachelor of Commerce degree
and a Bachelor of Law degree, both from University
Dato Abdul Rashid pursued his training in forestry of Melbourne. He is also a member of the Institute
(1971-1976) at the Institut Pertanian Bogor in Indonesia of Chartered Accountants, Australia. He started his
where he graduated with a Bachelor of Forestry. He career with Ernst & Young, Kuala Lumpur in 1999 in the
then furthered his studies at the University of Oxford Corporate Recovery & Insolvency department and moved
(1982-1983) United Kingdom for his M.Sc in land use to Ernst & Young, London in 2008. While with Ernst &
planning. Later on, he completed his Master in Business Young, he has had a very broad range of experience on
Administration (MBA major in marketing) at Universiti a wide variety of clients across various industries in Asia
Putra Malaysia (2006-2008). and Europe. He has extensive experience in leading
strategic independent business reviews and in advising
During his career, he served the Forestry Department stakeholders on significant restructuring of public and
for almost 30 years having worked in Terengganu, private companies. In October 2013, Mr. Kajendra joined
Kedah, Perak, Pahang and Headquarters in Kuala BRDB Developments Sdn Bhd as General Manager,
Lumpur. He was seconded as Director General of the Compliance and on 1 June 2014, he took up the position
Malaysia Timber Industry Board from 1998 to 2002 and of Chief Operating Officer of Mieco Chipboard Berhad.
subsequently assumed the position of Director General Subsequently, he was appointed as Executive Director of
of Forestry in 2002 to 2005 before retiring from service. Mieco Chipboard Berhad on 25 February 2016 until his
re-designation.
In his many years of service, he has gained expertise in
forest management, forest product marketing, land use
planning, natural resources management, environmental
studies and business studies.
Notes:
1) Save as disclosed above, none of the Directors has

any family relationship with any director and/or major
shareholder of the Company.
2) None of the Directors has:

any conflict of interest with the Company.
any conviction for offences within the past five
years.

KEY SENIOR MANAGEMENT PROFILES
MR Ng Wei Ping, Keith, aged 27, male, a Malaysian, graduated from University of Melbourne, Australia with a degree
in Bachelor of Commerce (Economics & Finance) in 2010.He joined SYF Resources Bhd Group in 2011 and last held
the position of Investment Manager of SYF Resources Bhd and the General Manager of SYF Development Sdn Bhd. He
joined MIECO as the General Manager in 2017. Keith is the son of Dato Sri Ng Ah Chai.
Mr Lim Kar Hor, aged 53, male, a Malaysian, is the Senior Manager, Technical Services of Mieco. He is now acting
as Plant Manager for Gebeng Plant. He holds a Bachelor degree in Electrical Engineering from University Teknologi
Malaysia. He was with a few multi-national electronic and audio-visual manufacturing companies prior to joining Mieco
in 2000. He is presently overseeing the manufacturing plant in Mieco Gebeng.
Mr Rashpal Singh, aged 48, male, a Malaysian, was appointed as Plant Manager, Operations for Lipis Plant. He
obtained his Master Degree in Business Studies majoring in Supply Chain Management from University Utara Malaysia.
He is in charge for the overall operation activities in Mieco Lipis plant. He gained his working experience in operations
of factories locally and was with a few multi-national manufacturing companies prior to joining Mieco in 2015.
Mr Ng Tien Ying, aged 33, male, a Malaysian, is the Assistant Manager, Finance & Accounts of Mieco. He holds an
advance diploma in Accountancy from Tunku Abdul Rahman College. Prior to joining Mieco, he was working in a tax
firm and subsequently with a few manufacturing companies, before joining MIECO in 2011.

Group Managing Directors
Discussion & Analysis
Dear Shareholders,
I am pleased to present to you the annual report and
audited financial statements for Mieco Chipboard
Berhad (MIECO or the Group) for the financial year
ended 31 December 2016 (FY2016).
Overview on Business Operations
The core business of the Group is in the manufacturing and distribution of particle boards or sometimes known as
chipboards, with primary focus on plainboards and melamine faced boards (MFC). We are the largest particle board
manufacturer in Malaysia with a total annual production capacity of 900,000 m3 per annum. Currently the Group
operates two plants - one in Kuala Lipis (Lipis) producing plainboards while our Gebeng plant currently produces both
plainboards and MFCs.
Revenue contribution from Malaysia in FY2016 was approximately 74% of Group turnover with the rest arising from
exports to almost 20 countries mainly in Asia Pacific (APAC) and Middle East. Export sales are all denominated in US
Dollar.
The Group is the major supplier of the domestic market demand which comes from the furniture industry, renovation &
fit-out construction industry and intermediaries who laminate chipboards for end users.
Corporate Development
During the year, I acquired a majority stake of 56.76% from BRDB Developments Sdn Bhd (BRDB). This marked the exit
of BRDB as the Groups long-standing shareholder. Subsequently, on my behalf, RHB Investment Bank Berhad officially
extended an unconditional mandatory take-over offer to acquire all the remaining shares in MIECO, representing
approximately 43.24% of the issued and paid-up share capital of MIECO (Offer Shares) not already held by myself for
a cash consideration of RM0.90 per Offer Share (Offer) pursuant to Section 218(2) of the Capital Markets and Services
Act 2007 and subparagraph 4.01(a) of the Rules on Takeover, Mergers and Compulsory Acquisition. On 25 October
2016, the Offer Document, setting out details, terms and conditions of the Offer together with the Form of Acceptance
and Transfer, was dispatched to the shareholders of MIECO. The Offer was closed at 5.00pm on 15 November 2016,
with 24,084 MIECO Shares which were complete and valid in all respects, duly accepted under the Offer.

Discussion & Analysis (Contd)
Review of Financial Performance
The Groups revenue decreased by approximately 9% to RM324.1 million due to lower sales resulting from lower
production volume at our Lipis plant in the first half of FY2016. The lower output largely stemmed from the shutting
down of the plant on heavier and longer maintenance work required. Lower sales volume was also reported due to
decreased sales of value-added products arising from a slowing domestic economy amidst weak external demand. The
Group managed to regain lost sales in the second half of the financial year thanks to higher sales volume for plainboard
and better plainboard selling prices. It is worth noting that the Group recorded an increase of 17% in its export sales to
RM84.0 million in FY2016 mainly due to healthy demand for plain chipboard from the APAC region.
The Groups pre-tax profit (PBT) leaped by a staggering 289% to RM72.5 million in FY2016 from RM18.6 million in the
previous financial year. This was mainly attributable to the one-off gain on the disposal of Mieco Wood Products Sdn
Bhd (MWP) of RM35 million in the first quarter of the financial year (Q1FY2016), the partial write back of impairment
on the Lipis plant amounting to RM28.1 million (of which the amount of RM45.8 million was provided in FY2013), and
improved raw material consumption contributing to the better operating results. Apart from this, a reduction of 31%
in finance costs resulting from lower term loan interest improved the Groups PBT. The Group also reported a surge of
343% in profit after tax (PAT) to RM82.7 million in FY2016 from RM18.6 million in FY2015. In addition to the above
mentioned items, the recognition of unutilised tax credit of RM10.1 million partly contributed to the increase as well.
The Groups cash balance as at 31 December 2016 is a healthy RM36.4 million contributed by the proceeds raised from
the disposal of MWP and positive operational cash flows. In terms of liquidity, the Groups net gearing was at 13% as
at 31 December 2016 versus 41% at 31 December 2015. The improved net gearing level was made possible through
the reduction in short term borrowings due to repayment of term loans amounting to RM28.5 million and reduction of
bankers acceptance facility amounting to RM16.8 million.
Review of Operations
The Group embarked on various streamlining of business operations over the years. To re-cap, in FY2015, the Semambu
operations was relocated to Gebeng following the sale of the Semambu land and buildings. The first phase of the
exercise involving the relocation of the Melamine Impregnation Line to Gebeng was completed in December 2015. In
January 2016, the new warehouse building was completed. The second phase entailing the relocation of Short Cycle
Press 2 was completed in the second quarter of FY2016 (Q2FY2016). This relocation rationalises the operations of the
Group through centralization of value-added production operations, reducing inter-plant transportation and logistics
costs and energy consumption, resulting in cost savings and improved operational efficiencies.
Towards the end of FY2016, the Group discontinued non-profitable operations consisting of paper-lamination
processing, furniture component and small scale ready to assemble products.
Risks to the Business
The Group sees the consistent and reliable operation of machinery as one of the major risks posed to the business. As
can be seen in the first half of FY2016 (H1FY2016), the prolonged shut-down of machinery on heavier and longer
maintenance disrupted the business, impacting sales for the year. To mitigate this risk, the Group has put in place a
robust Machinery Maintenance Programme encompassing scheduled and proactive maintenance work, repair, and
parts replacement and improvements that should reduce machine down-time moving forward.
Another significant risk that the Group faces is in the sourcing and procurement of raw materials. Additional cost due
to higher rubber wood log prices could impact earnings. However, given the dynamic demand-supply situation of the
industry, the Group is able to mitigate the risk of rising raw materials cost by passing it on to its customers.

Business Strategy
It is the aspiration of the new management to bring the Group to the next level, adding value to the established brand
that we have in MIECO and strengthening its position and competitive edge further. To achieve this, management will
be embarking on a two-pronged strategy: (i) to increase capacity utilization and improve cost efficiency; and (ii) to move
up the value chain by producing higher premium products resulting in potentially better profit margins.
Looking at the front end of our business operations, the Groups plainboard strategy will see gradual increase in higher
graded output over the next 3 years at our Lipis plant which will bring about higher prices, commanding better margins
and increase demand for export markets. Without focusing on downstream operations, the Group will increase and
expand MFC output at our Gebeng Plant. With this, our Lipis plant will solely focus on producing plainboards while the
Gebeng plant will only produce MFC, which should result in a more favourable production mix.
At the production end of our business operations, we will procure and ensure increased supply of raw materials to
support our strategy in increasing capacity utilization. A revised production planning schedule from customer-centric
to production based planning would enable us to achieve higher output more efficiently, reducing wastage and
production down time.
Outlook and Prospects
The Group achieved a significant milestone in FY2016 following the completion of the final settlement of the Companys
syndicated term loans. Coupled with various streamlining and rationalization efforts that took place over the year, we
are on a much firmer footing to unlock further value in the Group and continue to increase shareholders returns.
In 2017, the Group will allocate approximately RM15.0 20.0 million in capital expenditure (Capex) for major
replacement under the machinery maintenance program to enable the Group to further reduce downtime, ensuring
reliability and consistency, which ultimately will lead to improved capacity utilization. Part of the Capex will be allocated
for the construction of a facility to convert waste by-products to energy to reduce the Groups energy cost.
On the particle board market, there has been growing demand from key Asian markets. China has been imposing strict
restrictions on logging activities since 2015. As a result, domestic particle board manufacturers are facing an acute
shortage of raw materials for particle board production. We expect the shortage in China to lead to higher imports from
other countries. Moreover, demand from India, Indonesia and Vietnam is expected to rise, supported by the growing
demand for furniture on the back of population growth.
Supply on the other hand has tightened following the shutdown of some 30% of Chinas particle board factories due to
raw material shortage arising from strict logging restrictions since 2015. The prolonged rainfall and floods in southern
Thailand of late have further curbed the supply of raw materials to manufacturers in Southeast Asia. As such, we expect
the tightening supply of raw materials and steady demand for particle boards to lead to firmer particle board prices
going forward.
Apart from the above mentioned strategies, the Group would implement the following activities to enable us in
achieving a more sustainable performance:
1) To reduce production cost via stringent controls over raw material procurement and utilisation of key raw materials.
Management have implemented guidelines to cap the moisture levels of its rubber wood and sawdust material
supplies so as to allow for a more energy-efficient drying process.
2) To implement an active tendering system for glue suppliers to help reduce glue costs.

Dividend
On 27 February 2017, the Board of Directors declared an interim single-tier tax exempt dividend of 10 sen per ordinary
share in respect of the financial year ended 31 December 2016, which was paid on 24 March 2017. This is the first
dividend being paid by the Group in almost a decade following the sustained improvements in business operations in
the recent years.
It has been the Boards intention to resume the payment of dividends as soon as circumstances permit and following
the on-going rationalization of business operations the Board feels it is appropriate to reward the continued loyalty and
support of our shareholders. Whilst the Group has no dividend policy for now, the Board intends to formulate a policy
in the foreseeable future.
Appreciation
On behalf of the Board, I would like to express my sincere appreciation and gratitude to all shareholders, bankers, and
regulatory authorities for their assistance and our customers, suppliers, business partners and friends who have given
us continuous support through thick and thin all this while. My appreciation also goes to the Management, employees
and my fellow Directors for their dedication and commitment which were instrumental to the Groups commendable
results in FY2016.
I would like to record my appreciation to Dato Mohd Hanif Bin Sher Mohamed, Lt. Gen. (R) Dato Seri Mohamed Daud
Bin Abu Bakar, Dato Dr. Amarjit Singh A/L Santokh Singh, Mr Low Kim Seng, Mr Krishnan A/L Periyasamy and Puan Rozi
Binti Baharudin, all of whom had tendered their resignation during the year. On behalf of the Board, management and
staff, we thank them for their invaluable services and contributions to the Group and wish them the very best in their
future endeavours. Lastly, a warm welcome to our new Board members and I look forward to working closely with the
Board, management and staff to steer MIECO in the right direction.
Thank you.
Dato Sri Ng Ah Chai


Corporate Social Responsibility
ENGAGING WITH OUR COMMUNITIES IN 2016
COMMUNITY
Despite challenging market conditions and slow operation performance in 2016, MIECO continued with its efforts to
reach out and engage with the communities in Pahang, where its plants are located.
In line with its aim to develop local skills and talent, MIECO supported the training and development of local students in
University Malaysia Pahang (UMP), Universiti Teknologi Mara, Polytechnics and other colleges which are located around
Kuantan and Kuala Lipis.
MIECO accepted student trainees as part of its commitment to train and support the development of the communitys
future generation. This enabled the students to understand and appreciate the research that goes into being a
responsible manufacturer, and how to adapt to the new and emerging needs of markets and customers around the
world.
When the Semambu plant was moved to Gebeng, MIECO donated used garden chairs to SK Pelabuhan (Pra Sekolah),
Tabika Perpaduan Balok Makmur and Pusat Asuhan Pasti Balok Makmur at Balok area.
Used Garden Chairs were repainted and distributed to selected schools.
Top left: Pusat Asuhan Pasti Balok Makmor.

Top right: Tabika Perpaduan Balok Makmor.
Bottom: Pra Sekolah, SK Pelabuhan.

(Contd)
MIECO also donated to SK Kechor Tui,

Padang Tengku to build their store
room and had sponsored ready-
made cabinets to non-government
school, such as Pondok Bistari
Chendor in Kuantan, Pahang and
Madrasah Hafizatul Akmal in Kemaman,
Terenganu.
Cabinets installed in the rooms Handover of donated cabinets to

Pondok Bistari Chendor, Kuantan
ENVIRONMENT
Green The Earth Programme was organised by the Gebeng team, led by the Human Resource department with the
support from Kuantan Forest Department, KSSM, BAKES, Timber Union members. This was a half-day awareness and
education program about the importance of green environment for our future generation. Students from 10 to 12 years
old and were selected from various schools in Kuantan to join this program which was held at Tapak Semaian Kemunting,
Forest Department, Kuantan. Talks and quiz about green environment were the main activities. The highlight of the
programme for the students and their parents was being able to plant the seed of the Meranti tree from scratch, ie
preparing the soil to planting.
Green The Earth Programme on 27 Nov 2016 at Tapak Semaian Kemunting,

Forest Dept. Kuantan

(Contd)
MIECO Lipis Team, led by the Human Resource

Department also played their part in green environment
activities by organising gardening and housekeeping
activities at Klinik Desa Kechau Tui, Tabika Perpaduan
Padang Tengku and SK Kechor Tui. The team has
committed to continue with the monthly grass cutting
session at Tabika Perpaduan Padang Tengku.
Gardening & Housekeeping activities

by Lipis team members at Tabika
Perpaduan Padang Tengku
WORKPLACE
Employee engagement was high on the agenda in 2016. Both MIECO Teams organised Majlis
Berbuka Puasa Program during the month of Ramadan. This has been a yearly key program to
maintain good relation between Management Team and employees.
Program Berbuka Puasa at Gebeng & Lipis Plant; Management Team & Employees
In conjunction with Hari Raya 2016, MIECO Sports Club

and Recreation organised Jamuan Hari Raya at both
Gebeng & Lipis plants. BAKES, a Mieco Muslim Employees
Organization also organised a few motivation talk sessions
and solat Hajat at both plants. Timber members were also
very supportive towards all employees and Company
programs.
One of Tazkirah (Motivation) Session organised

by BAKES at Gebeng Plant

(Contd)
Health Screening programme was arranged by Human Resource Department at Gebeng

plant in two phases with the support from Klinik Kesihatan Balok.
Health screening conducted by Klinik Kesihatan Balok at Gebeng Plant
MIECO Management Team also visited and presented donations to a few MIECO staffs who needed serious medical
attention.
Top-up funds were raised by employees for an employee whose house was hit by a storm at Kampung Tebing Tinggi,
Cherok Paloh Kuantan. We continued with our good practice to visit and pass Get Well Gift to employees or their
spouses who were hospitalised or on long medical leave.
Mieco Gebeng Team visited employees who on seriously ill
HR passed donation to Department Manager visited A group of Mieco staff visited their
victim whose house was and delivered Get Well Gift to colleague who were on long medical leave
hit by a storm hospitalised employees at Hospital

(Contd)
MIECO Management has distributed RM50 cash voucher to all

employees as appreciation for achieving 50,000m3 board delivery to
customers in August 2016. Despite the slowdown in economy, non-
supervisor staff were given salary increment.
During year end of 2016, the Management has provided financial

assistance amounting to RM36,850.00 to MIECO employees who
have children that would be starting their school term in 2017. These
activities have strengthened the employees commitment towards
MIECO.
An employee who collected her schooling kids financial assistance at HR office
Whilst complying with the Local Rules and Regulations. MIECO has
also supported the local authorities activities by participating
in bowling competition among industries organised by Pahang
Department of Occupational, Safety & Health (DOSH) and donated
to Kuala Lipis Police Department (IPD Lipis) Soccer team for local
competition.
Mieco staffs who participated in bowling

competition organised by DOSH, Pahang
MARKETPLACE MIECOs growth strategy is to bring in new customers.

The new customers demand products with various
Customers exporting to European countries either combinations of specifications and international
directly or indirectly are imposed with increasing number standards. MIECO is committed in our research and
of regulations. The timber regulations (EUTR) require development to meet the demand, which most of the time
proof of legality of the raw materials, ie the woods requires new equipment and possibly the modification of
that were used to make particleboard. The absence our existing equipment. When raw material technology
of VPA (Voluntary Partnership Agreement) between has reached their limits, new and advanced raw materials
the government of Malaysia with the EU is forcing the are researched and introduced into the market.
Malaysian exporters to constantly prove the legality of
woods extracted from our rainforest. MIECO reaches new markets by listing our offerings
in Malaysias national green directory, promoting and
Besides providing our customers with the above prove showcasing commitment to the environment. We build
documents, MIECO is also making self-declarations on trust among our customers by carrying the MyHIJAU Mark.
our conformity to REACH and RoHSs limits of Prohibited MyHIJAU is a flagship project of GreenTech Malaysia.
Substances in our particleboards.
Our fast response to the requests for the documents MOVING FORWARD
helps to facilitate customers export operations.
MIECO Group of Companies will continue to stay active
in Corporate Social Responsibility, to engage with MIECO
employees in terms of their benefits and remain relevant
to local communities as a respected Malaysian brand.

FINANCIAL HIGHLIGHTS
FINANCIAL STATISTICS 2012-2016
2016 2015 2014 2013 2012

RM000 RM000 RM000 RM000 RM000
ASSETS
Non Current assets
Property, plant and equipment 413,293 402,018 400,868 412,258 477,423

Deferred tax assets 10,189 - - 386 517
423,482 402,018 400,868 412,644 477,940

Current assets 136,110 134,402 111,527 104,764 118,569
Non-current assets held for sale - - - 6,405 -
TOTAL ASSETS 559,592 536,420 512,395 523,813 596,509
EQUITY AND LIABILITIES

Equity attributable to equity holders of the Company
Share capital 210,000 210,000 210,000 210,000 210,000

Reserves 165,766 82,209 63,567 44,842 108,466
Total equity 375,766 292,209 273,567 254,842 318,466
Non-current liabilities 57,618 58,738 56,210 54,504 57,649

Current liabilities 126,208 185,473 182,618 214,467 220,394
Total liabilities 183,826 244,211 238,828 268,971 278,043
TOTAL EQUITY AND LIABILITIES 559,592 536,420 512,395 523,813 596,509
GROUP RESULTS
Revenue 324,096 354,988 344,820 318,327 330,871
Profit/(Loss) before taxation 72,519 18,643 19,441 (70,164) (9,190)

Tax credit/(expense) 10,159 - (1,564) 6,539 2,189
Profit/(Loss) after taxation 82,678 18,643 17,877 (63,625) (7,001)

Dividend paid - - - - -
Retained profit/(loss) 82,678 18,643 17,877 (63,625) (7,001)
SELECTED RATIOS
Basic earnings/(loss) per share 39.37 8.88 8.51 (30.30) (3.33)
Proposed dividend per share (sen) 10.00
Net tangible assets per share (RM) 1.79 1.39 1.30 1.21 1.52

FINANCIAL HIGHLIGHTS (Contd)
FINANCIAL STATISTICS 2012-2016
Revenue PROFIT / (LOSS) AFTER TAXATION

(in RM000) (in RM000)
400,000 100,000
354,988 82,678
344,820
330,871 324,096 80,000
318,327
60,000
300,000
40,000
17,877 18,643
20,000
200,000
0
-20,000 (7,001)
100,000
-40,000
-60,000
(63,625)
0 -80,000
2012 2013 2014 2015 2016 2012 2013 2014 2015 2016
TOTAL ASSETS SHAREHOLDERS FUND

(in RM000) (in RM000)
596,509
600,000 559,592 400,000
523,813 536,420 375,766
512,395
500,000
350,000
400,000 318,466
300,000 300,000 292,209
273,567
200,000 254,842
250,000
100,000
0 200,000
2012 2013 2014 2015 2016 2012 2013 2014 2015 2016

SHARE PERFORMANCE
Volume Price
(million) (RM)
160 2.50
2.18
140 2.06
2.0
120
1.77
1.82
1.77
100
1.42 1.5
1.28 1.40
80
1.23
1.08
0.96
0.91 0.92 0.92 0.92 1.00
60 0.88 1.00
0.88 0.88 0.90

0.87
0.82 0.81 0.82
39.362
40 37.809
26.997 26.106 0.50

24.060
21.251 21.847 19.461
20 15.770 15.867
11.005
5.440
0 0.00
Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16 Dec 16 Jan 17 Feb 17 Mar 17
Total Volume High Px Low Px

CORPORATE GOVERNANCE STATEMENT
The Board of Directors of MIECO (the Board) is committed to maintain an appropriate and sound system of good
corporate governance within the Group with the fundamental objective of protecting and enhancing shareholders
value and the financial performance of the Group as well as the interests of stakeholders.
The Board is pleased to outline below the key aspects on how the Group has applied the principles and recommendations
set out in the Malaysian Code on Corporate Governance 2012 (Code).
PRINCIPLE 1 ESTABLISH CLEAR ROLES AND RESPONSIBILITIES
Functions of the Board and Management
The Board is overall responsible for the direction and control of the Group as it formulates policies, sets strategic
directions and oversees the investments and operations of the Group.
In order for the Board to discharge its functions effectively, the Board has delegated certain functions to the committees
to assist in the execution of its duties and responsibilities. These committees operate under clearly defined terms of
reference and have authority to examine particular issues and the Chairman of the respective committees will report to
the Board on the key issues deliberated and outcome of the committees meetings. These Board committees include
the Audit Committee, Nomination Committee and Remuneration Committee.
Roles and Responsibilities
The Board assumes the following principal roles and responsibilities:
formulating the business direction and objectives of the Group;

reviewing, adopting and approving the Groups annual budgets, strategic plans, key operational initiatives, major
investments and funding decisions;
overseeing the conduct of business of the Group;
reviewing the risk management process within the Group;
assuming responsibility in succession planning within the Group; and
reviewing and ensuring the adequacy and effectiveness of management information and internal control systems
to ensure compliance with applicable standards, laws and regulations.
Management is accountable for the execution of the expressed policies and attainment of the Groups corporate
objectives. The demarcation complements and reinforces the supervisory role of the Board.
Ethical Codes and Standards
The Board recognises the importance of the Code of Conduct and Ethics, with the intention in achieving the aims of
cultivating good ethical behaviour that in turn promote the values of transparency, integrity, accountability and social
responsibility.
The Board has adopted a Board Charter which sets out the principal roles and responsibilities of the Board and a Code
of Conduct and Ethics for Directors that sets out the principles and standards of business ethics and conducts of the
Group. The Group has also put in place a Whistle Blowing Policy which enables any employee and/or management of the
Group to seek guidance and express concerns on the reporting of suspected and/or known misconduct, wrongdoings,
corruption and instances of fraud, waste and/or abuse involving resources of the Group.

(Contd)
Strategies Promoting Sustainability
The Board is mindful of the importance of business sustainability and, in developing the corporate strategy of the Group,
its impact on the environmental, social and governance aspects is taken into consideration. The Groups activities on
corporate social responsibility for the financial year ended 31 December 2016 are disclosed on pages 11 to 15 of this
Annual Report.
Access to Information and Advice
The Directors are given adequate notice of Board meetings. Board papers together with the agenda are circulated prior
to scheduled board meetings, via emails or physical copies, to ensure sufficient time is given to the Directors to read the
Board papers and seek any clarification that they may need from Management or to consult the Company Secretary or
independent advisers, before the Board Meetings, if necessary. This enables the Directors to duly discharge their duties
and ensure that deliberations at the meeting are focused and constructive.
The Board papers include reports on the Groups financial, operational, corporate developments and proposals.
Senior management staff are invited to attend Board meetings to report on matters relating to their respective areas of
responsibility and also to provide details or clarification on issues that may be raised by any Director.
All Directors have full and unrestricted access to senior management for advice and information, and support services
of the Company Secretary in ensuring the effective functioning of the Board. The Directors may also seek independent
professional advice in the furtherance of their duties at the Companys expense, if required, subject to the approval of
the Board, and depending on the quantum of the fees involved.
Qualified Company Secretary
The Board is supported by a licensed Company Secretary. The Company Secretary is to ensure that the Board procedures
are adhered to at all times during meetings and advise the Board on matters, including corporate governance issues
and Directors responsibilities in complying with relevant legislation and regulations.
The Company Secretary attends all Board and Board Committee meetings to ensure that all deliberation of issues
discussed and decisions/conclusions made are recorded accurately. The Company Secretary also work closely with the
management to ensure timely flow of information to the Board.
On an ongoing basis, the Directors have separate and independent access to the Company Secretary.
PRINCIPLE 2 STRENGTHEN COMPOSITION
Board Composition
As at the date of this statement, the Board has five members, comprising one Independent Non-Executive Chairman,
one Group Managing Director, two Independent Non-Executive Directors and one Non-Independent Non-Executive
Director. The Company is in compliance with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad
(Bursa Securities) which stipulates that at least one third of the Board members must be independent. The Board has
a female Director, reflecting the Boards efforts towards achieving a more gender diversified Board. The composition
of the Board represents a balanced mix of experienced professionals in the fields of business, finance and general
management. Together, the Directors bring a wide range of expertise and skills necessary for the continued success of
the Group. A brief profile of each Director is set out on pages 4 and 5 of this Annual Report.

(Contd)
Nomination Committee
The Board has applied the best practices of the Code by setting up a Nomination Committee (NC) comprising exclusively
three (3) Independent Non-Executive Directors.
The composition of the NC as of the date of this Annual Report is as follows:
Dato Abdul Rashid Bin Mat Amin (Chairman / Independent Non-Executive Director)
Mr. Cheam Tow Yong (Member / Independent Non-Executive Director)
Y.A.M. Tengku Puteri Seri Kemala Pahang Tengku Aishah Binti Sultan Haji Ahmad Shah (Member / Independent
Non-Executive Chairman)
The terms of reference of the NC can be viewed at the Companys website at www. mieco.com.my.
The NC meets as and when deemed necessary. During the financial year under review, no separate meeting was held
by the NC due to the changes in the composition of the NC encountered by the Group as disclosed below:
(i) On 26 May 2016, Lt. Gen. (R) Dato Seri Mohamed Daud Bin Abu Bakar and Dato Dr. Amarjit Singh A/L Santokh
Singh decided to retire from the Board and not to seek re-appointment. Accordingly, their appointment to NC
ceased on the same date.
In place thereof, Dato Mohd Hanif Bin Sher Mohamed and Puan Rozi Binti Baharudin were appointed as members
of NC to fill the vacancies.
(ii) On 16 November 2016, Dato Mohd Hanif Bin Sher Mohamed, Puan Rozi Binti Baharudin and Mr. Low Kim
Seng have tendered their resignation as the Independent Non-Executive Directors and Non-Independent Non-
Executive Director of the Company respectively. Accordingly, their appointment to the NC ceased on the same
date.
(iii) On 18 November 2016, the following candidates were appointed as members of the NC to fill the above
mentioned vacancies:
Dato Abdul Rashid Bin Mat Amin

Mr. Cheam Tow Yong
(iv) On 3 January 2017, Y.A.M. Tengku Puteri Seri Kemala Pahang Tengku Aishah Binti Sultan Haji Ahmad Shah was
appointed as the third member of the Nomination Committee.
New appointments to the Board Committees during the financial year under review was discussed and approved
directly by the Board at the relevant Board meetings.
During the financial year under review, the activities carried out by the NC are as follows:
Reviewed and assessed the profile of a new candidate for appointment as a member of the Board, and
recommended the candidate for appointment; and
Reviewed and recommended to the Board, the re-election and re-appointment of the Directors who will be
retiring at the forthcoming Annual General Meeting of the Company.

(Contd)
Board Membership Criteria
In selecting a suitable candidate, the NC considers, among others, the candidates qualification, experience and
accomplishments, with the objective of having a Board with diverse backgrounds and experience in business. All
Directors are expected to be individuals with unquestionable integrity, high personal and professional ethics, sound
business judgement, and the ability and willingness to commit sufficient time to the duties of the Board. The final
decision on the appointment of a candidate nominated by the NC rests with the whole Board.
Gender, Ethnicity and Age Group Diversity Policy
The Company adheres to the practice of non-discrimination of any form throughout the Company and as such does
not set a specific target on the composition of the Board and management in terms of gender, age or ethnicity. The
Company provides equal opportunity to candidates with merits and believes it is vital to recruit and retain the best
available talent regardless of gender, ethnicity and age. The Board shall endeavour to achieve greater diversity as and
when the opportunity arises. Notwithstanding the recommendation of the Code, the Board is presently of the view that
there is no necessity to fix a specific gender diversity policy in view of the Companys commitment to ensuring that all
Directors are appointed on merit and is in line with the standards as set out in Para 2.20A of the Main Market Listing
Requirements. Presently, there is one female Director on the Board.
Board Assessment
The NC has a formal assessment in place to assess the effectiveness of the Board as a whole and the contribution
of each individual Director. The assessment comprises the Board Assessment and Individual Self-Assessment. The
assessment of the Board is based on specific criteria covering areas such as board structure, board operations, board
roles and responsibilities and board chairmans roles and responsibilities. For individual assessment, criteria covering
contribution to interaction, quality of input, understanding of role and board chairmans role were used.
During the financial year under review, no evaluations on the contribution of the Directors and the effectiveness of the
Board were conducted by the NC due to the changes in the entire composition of the Board of Directors in November
2016.
Remuneration Policies
The Remuneration Committee (RC) comprises three Non-Executive Directors:
Dato Abdul Rashid Bin Mat Amin (Chairman / Independent Non-Executive Director),
Mr. Cheam Tow Yong (Member / Independent Non-Executive Director) and
Y.A.M. Tengku Puteri Seri Kemala Pahang Tengku Aishah Binti Sultan Haji Ahmad Shah (Member / Independent Non-
Executive Chairman).
The terms of reference of the Remuneration Committee can be viewed at the Companys website at www.mieco.com.my.
There were several changes made to the composition of the RC during the financial year under review, as disclosed
below:
(i) On 26 May 2016, Lt. Gen. (R) Dato Seri Mohamed Daud Bin Abu Bakar and Dato Dr. Amarjit Singh A/L Santokh
Singh decided to retire from the Board and not to seek re-appointment. Accordingly, their appointment to RC
ceased on the same date.
In place thereof, Dato Mohd Hanif Bin Sher Mohamed and Puan Rozi Binti Baharudin were appointed as members
of RC to fill the vacancies.

(Contd)
(ii) On 16 November 2016, Dato Mohd Hanif Bin Sher Mohamed, Puan Rozi Binti Baharudin, and Mr. Low Kim
Seng tendered their resignation as Independent Non-Executive Directors and Non-Independent Non-Executive
Director of the Company respectively. Accordingly, their appointment to the RC ceased on the same date.
(iii) On 3 January 2017, the Board resolved to appoint Dato Abdul Rashid Bin Mat Amin, Mr. Cheam Tow Yong
and Y.A.M. Tengku Puteri Seri Kemala Pahang Tengku Aishah Binti Sultan Haji Ahmad Shah as members of the
Remuneration.
The RC is responsible for reviewing the performance of the Executive Directors and furnishing recommendations to
the Board the remuneration packages and terms of employment of the Executive Directors. The determination of
the remuneration of the Non-Executive Directors is a matter to be decided by the Board as a whole. A fixed sitting
allowance is also paid to Non-Executive Directors for each Board or committee meeting they attend. All fees payable
to the Directors are subject to shareholders approval at the annual general meeting (AGM). For the financial year
ended 31 December 2016, the Board has decided to recommend the payment of Directors fees to the Independent
Directors and the payment of Directors benefits* from 1 January 2017 until the next AGM for shareholders approval
at the forthcoming AGM.
In addition, the Directors have the benefit of Directors & Officers liability insurance in respect of any liabilities arising
from their acts committed in their capacities as Directors and Officers of the Company. However, the said insurance
policy does not indemnify a Director or Officer if he is proven to have acted fraudulently, or dishonestly, or in breach
of his duty or trust. Details of the Directors remuneration for the financial year ended 31 December 2016 are set out in
Note 26 of the Annual Financial Statements of this Annual Report. The number of Directors whose remuneration falls
within the following bands is as follows:
The Company The Group

Non- Non-
Range of Executive Executive Executive Executive
Remuneration Director Director Director Director
50,000 & below - 8 - 9

100,001 200,000 - - - -
300,001 400,000 1 - 1 -
600,001 700,000 1 - 1 -
The Board is of the opinion that disclosure of remuneration by appropriate components and bands is adequate to meet
the objectives of the Code.
* Note : Directors benefits consist of sitting allowance and basic fee as other emolument based on their responsibility
in Board Committees.
PRINCIPLE 3 REINFORCE INDEPENDENCE
Assessment of Independent Directors
The presence of the Independent Directors helps in providing independent and constructive views, advice and opinions
to the benefits of the investors, customers, and other stakeholders. They also represent the element of objectivity,
impartiality and independent judgement of the Board. This ensures there is adequate check and balance at the Board
level.

(Contd)
Independent Directors are subject to an independence assessment prior to their appointment and annually thereafter.
In this respect, the Board, through the NC, assesses the independence of its Independent Directors based on the
criteria set out in the Main Market Listing Requirements of Bursa Securities. All the Independent Directors in office as
at end of 2016 have reaffirmed their independence. The independence status of Mr. Cheam Tow Yong, Dato Abdul
Rashid Bin Mat Amin and Y.A.M. Tengku Puteri Seri Kemala Pahang Tengku Aishah Binti Sultan Haji Ahmad Shah have
been reviewed by the NC prior to their appointment as Independent Directors on 15 November 2016 and 3 January
2017 respectively.
Tenure of Independent Directors
The Board is aware that the tenure of an Independent Non-Executive Director should not exceed a cumulative term of
nine (9) years as recommended by the Code.
Upon completion of the nine (9) years, the Independent Non-Executive Director concerned may:
(i) Continue to serve on the Board if deemed appropriate and suitable by the Board, subject to him/her being re-
designated as Non-Independent Director; or
(ii) Remain as an Independent Non-Executive Director if deemed appropriate and suitable by the Board, subject to
the shareholders approval. The Board must provide justification for the decision.
As of the date of this Annual Report, none of the Independent Non-Executive Directors has served a cumulative term
of nine (9) years.
Position of Chairman and Group Managing Director
Division of roles between the Non-Executive Chairman and the Group Managing Director is clearly defined to ensure
that there is an appropriate balance of roles, responsibilities and accountability.
The Chairman leads the effective running of the Board. She ensures that the Board receives sufficient and relevant
information on financial and non-financial matters to enable them to participate actively in meetings. The Group
Managing Director is responsible for implementing the policies and decisions of the Board, overseeing the operations
as well as coordinating the development and implementation of business and corporate strategies.
PRINCIPLE 4 FOSTER COMMITMENT
Time Commitment and Board Meetings
The Directors are expected to give sufficient time and attention to carry out their responsibilities. Under the Board
Charter, a Director is required to notify the Chairman before accepting any new directorship in any other company and
the notification shall explain the expectation and an indication of the time commitment that will be spent on the new
appointment. All the Directors hold not more than five directorships each in public listed companies.
The Directors have demonstrated their ability to devote sufficient time and commitment to their roles and responsibilities.
Board meetings
The Board meets at least 5 times a year, with additional meetings for particular matters convened as and when necessary.

(Contd)
A total of 5 Board meetings were held during the financial year ended 31 December 2016. The attendance record of
each Director is as follows:
Total Meetings Percentage of

Directors Attended Attendance %
Y.A.M. Tengku Puteri Seri Kemala Pahang Tengku Aishah Not Applicable Not Applicable
Binti Sultan Haji Ahmad Shah
(Appointed on 3 January 2017)
Dato Sri Ng Ah Chai 1/1 100

(Appointed on 15 November 2016)
Mr. Cheam Tow Yong 1/1 100

Independent Non-Executive Director
Dato Abdul Rashid Bin Mat Amin 1/1 100

Mr. Kajendra A/L Pathmanathan 4/4 100

(Appointed as Executive Director on 25 February 2016, Re-designated
as Non-Independent Non-Executive Director on 30 December 2016)
Dato Mohd Hanif Bin Sher Mohamed 4/4 100

(Resigned on 16 November 2016)
Mr. Krishnan A/L Periyasamy 4/4 100

Mr. Low Kim Seng 4/4 100

Puan Rozi Binti Baharudin 3/3 100

(Appointed as Independent Non-Executive Director on 25 February 2016,
Resigned on 16 November 2016)
Lt. Gen. (R) Dato Seri Mohamed Daud Bin Abu Bakar 2/2 100
(Retired on 26 May 2016)
Dato Dr. Amarjit Singh A/L Santokh Singh 2/2 100


(Contd)
All the Directors complied with the minimum 50% attendance requirement in respect of Board meetings held during the
financial year ended 31 December 2016 as stipulated under Paragraph 15.05 of the Main Market Listing Requirements
of Bursa Securities.
Additionally, in between Board meetings, the Directors also approved various matters requiring the sanction of the
Board by way of circular resolutions.
Directors Training
The Board takes cognisance of the importance of continuous training in keeping the Directors updated and informed
on the changes and developments of operating environment and the corporate regulatory framework.
All the Directors have attended and completed the Mandatory Accreditation Programme (MAP). In addition to that,
the Directors are briefed and updated at the quarterly meetings by the External Auditors, Internal Auditors and/or
the Company Secretary on relevant amendments to the Listing Requirements, corporate governance practices and
principles, risk management and internal control approaches, Malaysian Financial Reporting Standards as well as
auditing requirements. The Directors also gained insights to the market development through constructive and active
deliberations at the Board meetings.
The Directors, on their own efforts, continue to equip themselves with latest knowledge and updates on the business
and economic environment via trade fairs, industrial periodicals, professional journals and attending the following:
Bursa Malaysia CG Breakfast Series with Directors - How to Leverage on AGMs for Better Engagement with Shareholders
The Directors will, from time to time, assess the needs to enrol in formal, structured training programmes.
PRINCIPLE 5 UPHOLDING INTEGRITY IN FINANCIAL REPORTING
Compliance with Applicable Accounting Standards
The Board strives to provide shareholders with a balanced and meaningful evaluation of the Groups financial
performance, financial position and prospects through the annual audited financial statements, interim financial reports,
annual report and announcements to Bursa Securities.
The interim financial reports, annual audited financial statements and annual report of the Group for the financial
year ended 31 December are prepared in accordance with the Malaysian Financial Reporting Standards, Listing
Requirements and the Companies Act, 2016. The Board is assisted by the Audit Committee in overseeing the financial
reporting processes and ensuring the quality of its financial reporting.
The Directors Responsibility Statement in respect of the preparation of the Annual Audited Financial Statements is set
out on page 35 of this Annual Report.
Independence of External Auditors
The Board maintains a transparent and professional relationship with the external auditors through the AC. The AC
invites the external auditors to attend its meetings as and when required. From time to time, the external auditors have
highlighted to the AC matters that require the ACs attention. The AC will meet twice a year with the external auditors
without any executive Board member present to enable exchange of views on issues requiring attention. The external
auditors declare their independence annually to the AC as specified by the By-Laws issued by the Malaysian Institute
of Accountants.

(Contd)
PRINCIPLE 6 RECOGNISE AND MANAGE RISKS
Risk Management Framework
The Board acknowledges its overall responsibility for maintaining a sound system of internal control to safeguard the
investment of its shareholders and the Groups assets. The key features of the Groups system of risk management are
set out in the Statement on Risk Management and Internal Control of this Annual Report.
Internal Audit Function
The Board has established an independent internal audit function that reports directly to the AC. This internal audit
function is outsourced to an independent professional firm which is independent of the activities and operations of the
Group. Details of the Groups internal control system and framework are set out in the Statement on Risk Management
and Internal Control and the AC Report of this Annual Report.
PRINCIPLE 7 TIMELY AND HIGH QUALITY DISCLOSURE
The Board recognises the need for and the importance of clear and effective communication with shareholders,
institutional investors and the investing public. The Group communicates with its shareholders and stakeholders
regularly through timely release of financial results on a quarterly basis, Companys annual reports and other circulars
to shareholders and where appropriate, ad hoc press statements which serve as the principal channel in keeping
the shareholders and the investing public informed of the Groups major developments and overviews of financial
performance and progress throughout the year.
The Group maintains a website at www.mieco.com.my where shareholders as well as members of public can access
the latest information on the Company and on the business activities of the Group. Alternately, they may obtain the
Companys latest announcements via the website of Bursa Securities at www.bursamalaysia.com.
PRINCIPLE 8 STRENGTHEN RELATIONSHIP BETWEEN COMPANY AND SHAREHOLDERS
Shareholders Participation at General Meeting
The AGM represents the principal forum for dialogue and interaction with all shareholders. Shareholders are given the
opportunity to participate in the question and answer session on the Groups operations and proposed resolutions. The
Directors, senior management and the external auditors are available to respond to shareholders queries during the
AGM.
Shareholders who are unable to attend personally are allowed to appoint proxy/proxies to attend and vote on their
behalf. Notice of the Annual General Meeting is circulated to the shareholders at least twenty-one (21) days prior to the
meeting.
Poll Voting
The Board is mindful of the poll voting requirement under Paragraph 8.29A of the Listing Requirements of Bursa
Securities. The Board will implement poll voting for all the resolutions to be passed in the forthcoming Annual General
Meeting. The Company will appoint one (1) scrutineer, who is independent of the Group and the person undertaking
the polling process, to validate the votes cast.

(Contd)
COMPLIANCE STATEMENT
The Board recognises the importance of good corporate governance towards long term sustainability of the Group.
To this end, the Board always strive to adopt the principles and recommendations promoted by the Code. Save as
disclosed within this statement, the Group has, and will continue to apply the principles and recommendations as set
out in the Code where practical and appropriate.
ADDITIONAL CORPORATE DISCLOSURE
Utilisation of Proceeds
The Company did not raise funds through any corporate proposal during the financial year ended 31 December 2016
(FY2016).
Recurrent Related Party Transactions
The Company proposes to seek new Shareholders Mandate for the Recurrent Related Party Transactions of a Revenue
or Trading Nature in this 44th Annual General Meeting (AGM) (Proposed New Shareholders Mandate). The Proposed
New Shareholders Mandate, details as provided in the Circular to Shareholders dated 28 April 2017 sent together with
this Annual Report, if approved by the shareholders, would be valid until the conclusion of the Companys next AGM.
Audit and Non-Audit Fees Paid
During the FY2016, the total audit and non-audit fees incurred by the Company and the Group are as follows:
Mieco Chipboard Berhad Mieco Chipboard Group

(RM) (RM)
Audit Fees 60,000.00 155,000.00

Non-Audit Fees - -
Material Contracts
Save for the recurrent related party transactions as disclosed in the Audited Financial Statements of the Group and the
Company for the financial year ended FY2016, there were no material contracts entered into by the Company and its
subsidiaries involving the interests of the Directors, chief executive who is not a director or major shareholder.
Contracts Relating To Loans
During the FY2016, there were no material contracts relating to loans entered into by the Company and its subsidiaries
involving Directors, chief executive and/or major shareholders.
Insider Trading
During the FY2016, there was no insider trading reported.
This statement was approved by the Board at its meeting held on 30 March 2017.

AUDIT COMMITTEE REPORT
COMPOSITION OF AUDIT COMMITTEE
As at the date of this report, the Audit Committee (AC) comprises the following members:
Mr. Cheam Tow Yong (Chairman/Independent Non-Executive Director)

Dato Abdul Rashid Bin Mat Amin (Member/Independent Non-Executive Director)
Y.A.M. Tengku Puteri Seri Kemala Pahang Tengku Aishah Binti Sultan Haji Ahmad Shah (Member/Independent
Non-Executive Chairman)
AUTHORITY AND DUTIES
The details of the terms of reference of the AC are available for reference at www.mieco.com.my.
MEETING ATTENDANCE
During the financial year ended 31 December 2016, five AC meetings were held. The Executive Director and Financial
Controller attended all the AC meetings by invitation to brief the AC on specific issues. Internal auditors attended
three of the AC meetings to present their internal audit reports. The external auditors were present at two of the AC
meetings where matters relating to the audit of the statutory financial statements were discussed. The AC held one
private discussion with the external auditors without the presence of the executive management.
Details of attendance of the AC members are as follows:

Mr. Cheam Tow Yong 1/1 100

Dato Abdul Rashid Bin Mat Amin 1/1 100

Y.A.M. Tengku Puteri Seri Kemala Pahang Tengku Aishah Not Applicable Not Applicable
(Appointed on 3 January 2017)
Mr. Low Kim Seng 4/4 100

Dato Mohd Hanif Bin Sher Mohamed 2/2 100

(Appointed on 26 May 2016, Resigned on 16 November 2016)
Puan Rozi Binti Baharudin 2/2 100

(Appointed on 26 May 2016, Resigned on 16 November 2016)

(Contd)

Lt. Gen. (R) Dato Seri Mohamed Daud Bin Abu Bakar 2/2 100
Dato Dr. Amarjit Singh A/L Santokh Singh 2/2 100

The AC Chairman has conveyed to the Board matters of significant concern raised by the external auditors and internal
auditors. Confirmed minutes of AC meetings were also circulated to the Board for information.
SUMMARY OF ACTIVITIES
The AC has carried out its duties in accordance with its terms of reference during the financial year ended 31 December
2016. The activities carried out by the AC included the following:
(a) reviewed the quarterly unaudited financial results of the Group before recommending them to the Board for
approval and subsequent release to Bursa Malaysia Securities Berhad;
(b) reviewed the annual audited financial statements of the Group with the external auditors before recommending
to the Board for approval. There was focus on changes on adjustments/issues affecting the audit. The external
auditors report on the significant audit and accounting issues arising from their audit as well as the accompanying
management responses/resolutions were also reviewed by the AC;
(c) reviewed the audit plan with the external auditors, in terms of the key areas of audit emphasis, significant
accounting and auditing issues, as well as the impact of the new or proposed changes in the accounting standards
and regulatory requirements;
(d) met with the external auditors without the presence of any executive board members or management, to discuss
issues arising from their audit including management cooperation in the audit process, financial reporting issues,
operations and for sharing of information;
(e) reviewed the annual risk-based internal audit plan proposed by the internal auditors to ensure adequate scope
and coverage of their activities and key risk areas identified and covered;
(f) reviewed internal audit reports presented by the internal auditors, especially with regard to the issues raised,
audit recommendations and managements responses. Where necessary, the AC directed action to be taken by
management to rectify and improve the system of internal controls and procedures;
(g) reviewed recurrent related party transactions of the Group; and
(h) reviewed and approved the Audit Committee Report for inclusion in the Companys Annual Report.

(Contd)
INTERNAL AUDIT FUNCTION
The AC is supported by an internal audit (IA) function which is outsourced to an independent professional firm which is
independent of the activities and operations of the Group. The IA function provides independent and objective review
on the state of internal control and compliance with the Groups policies and procedures in accordance with the annual
risk-based internal audit plan approved by the AC. The IA function assists the AC in accomplishing its objectives by
bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, internal
control and governance process.
During the financial year ended 31 December 2016, the outsourced IA, namely Lefis Consulting Sdn. Bhd. tabled the
Annual Internal Audit Plan for ACs review, and carried out audit review on internal control, policy and procedures of
the Group. Areas of audit included Procurement of Spare Parts & Consumables and Procurement of Fabrication &
Repair Works for Plant 2 & Plant 3. Follow-Up Audits on Warehouse Inventory Despatch for Plant 2 & Plant 3 and Review
of Standard Cost (Plain Board). The resulting reports of the audits undertaken, incorporating audit recommendations
and managements responses were presented at the quarterly AC meetings for the ACs deliberation and issued to the
management of the respective operating units concerned for appropriate remedial actions to be taken to improve the
relevant systems and procedures within the agreed timelines. The Executive Director and the Financial Controller were
present in the AC meetings to explain and clarify on the actions taken to rectify the audit issues highlighted.
There were no material losses incurred during the financial year as a result of weaknesses in the system of internal
control and management continues to take appropriate measures to strengthen and enhance the adequacy and
effectiveness of the control environment.
Total costs incurred for the IA function of the Group for the financial year ended 31 December 2016 amounted to
RM37,000.00

STATEMENT ON RISK MANAGEMENT
AND INTERNAL CONTROL
RESPONSIBILITY
The Board affirms its overall responsibility for maintaining an adequate and sound risk management and internal
control system within the Group and for reviewing its adequacy and integrity of such system on a regular basis to
safeguard shareholders investment and the Groups assets. However, in view of the inherent limitations in any such
system, the risk management and internal control system is designed to manage rather than to eliminate the risk of
failure to achieve business objectives. Hence, the risk management and internal control system can only provide a
reasonable combination of preventive, detective and corrective measures but not absolute assurance against material
misstatement of management and financial information or against financial losses and fraud.
Whilst the Board maintains responsibility over risk and control issues, management is responsible for implementing
policies, procedures and guidelines on risk and control by identifying and evaluating the risks faced and design,
operate and monitor a suitable system of internal control to manage these risks.
RISK MANAGEMENT
The Board recognises that risk management is an integral part of the Groups business operations and that the
identification and management of such risks are important to ensure the achievement of the Groups corporate
objectives.
Regular meetings of the Board, Board committees and management represent the main platform by which the Groups
performance and conduct are monitored. The senior management teams are empowered with the responsibility of
managing their respective operations. Through regular operational meetings, the senior management teams identify,
discuss and deal with operational, financial and key management issues. Significant risks identified are escalated to
the attention of the Board. The Board is responsible for setting the business directions and overseeing the conduct of
the Groups operations. With the assistance of the internal audit (IA) function, the Board, through the Audit Committee
(AC), continually reviews the adequacy, effectiveness and integrity of the risk management processes in place within
the various operating businesses. The AC also reviews and deliberates on any matters relating to internal controls
highlighted by the external auditors in the course of their statutory financial audit of the Group. Through these
mechanisms, the Board is informed of all major control issues pertaining to internal controls, regulatory compliance
and risk taking.
INTERNAL AUDIT FUNCTION
The Groups IA function is carried out by an independent professional service firm. The principal duty and responsibility
of IA is to examine and evaluate the adequacy and effectiveness of the Groups system of internal control, risk
management process and compliance framework on behalf of the Board.
The outsourced IA function adopts a risk-based approach in developing its audit plan which addresses all the core
auditable areas of the Group based on their risk profile. The IA function provides the AC the results of the internal audit
reviews together with IAs recommendations for improvement, managements response and corrective actions taken or
to be taken by management with regard to the weaknesses highlighted. Follow ups will be carried out by the IA function
should there be unresolved findings and the status of actions taken by management will be reported to the AC. Based
on the internal audit reviews carried out, none of the weaknesses noted by the IA function has resulted in any material
losses, contingency or uncertainties that would require disclosure in this Annual Report.

AND INTERNAL CONTROL (Contd)
KEY ELEMENTS OF RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM
The Group has adopted an ongoing risk management process for identifying, evaluating, monitoring and managing
significant risks affecting the achievement of its business objectives.
The key elements of the Groups risk management and internal control system are set out below:
The Board is supported with several established Board committees in the execution of its responsibilities namely
the Audit, Nomination and Remuneration Committees. Each Committee has clearly defined terms of reference.
These committees have the authority to examine all matters within their scope and report to the Board with their
recommendations.
There is an organisational structure with formally defined lines of responsibility and delegation of authority to
ensure proper identification of accountabilities and segregation of duties.
The Group has clear and formally defined approving authority limits and authorisation procedures, which is
the primary instrument that governs and manages the business decision making process within the Group. It
also ensures that a system of internal control and checks and balances are incorporated therein. The Authority
Chart is periodically reviewed and updated to reflect changes in the business, operational and organisational
environment.
There are documented standard operating policies and procedures covering the critical and significant facets
of the Groups business processes and they form an integral part of the internal control framework to safeguard
shareholders investment and the Groups assets against material loss. These areas include manufacturing, human
resource, information technology, sales, financial and credit management as well as occupational safety, health
and environment. These policies and procedures are reviewed and updated from time to time to meet the
operational needs.
Common Group policies are available on MIECOs intranet for easy access by staff. The intranet is used as an
effective means of communication and knowledge sharing at all levels.
Human resource policies and guidelines are established to provide support to the Groups vision. These policies
provide guidance to employees on areas such as discipline, employee performance appraisals and other related
matters. Ongoing training and development programmes are conducted to improve and enhance employees
competencies and skills.
The Group adopts a strategic planning, annual budgeting and target setting process that includes forecasts for
each area of business. The Board reviews and approves the Annual Management Plan and Budget. The Boards
evaluation includes assessment of risks and opportunities identified by management in the course of the annual
budgeting process. Management monitors closely actual performances against budget and provides the Board
with updates on the Groups performance periodically.
The Group continues to maintain MIECO Quality Management System, Environmental Management System and
Occupational Health and Safety Management System certifications. Such quality management systems provide
the Group with an improved control of key processes and a foundation for improving quality, customer service and
customer satisfaction. The business operations of the Group are also governed by various regulations and laws
applicable to the wood industry. Compliance audits are regularly conducted by various independent bodies for
the various certifications and licences obtained from the local governmental authorities and certain multinational
certification bodies.

AND INTERNAL CONTROL (Contd)
There are adequate insurance coverage and physical safeguards on major assets to ensure that the assets of
the Group are sufficiently covered against any mishap that could result in a material loss. A yearly policy renewal
exercise is undertaken by management to review the relevance and adequacy of the insurance coverage. There is
also a Directors & Officers insurance coverage for the Directors and Officers of the Group.
The Group operates an Enterprise Resource Planning system which enables transactions to be captured,
compiled and reported in a timely and accurate manner. Information systems in the Group provide management
with data, analyses, variations, exceptions and other inputs relevant to the Groups performance. Internal control
requirements are also embedded in the Groups computerised systems as well.
WEAKNESSES IN INTERNAL CONTROLS THAT RESULT IN MATERIAL LOSSES
During the financial year under review, some areas for improvement in the risk management and internal control system
were detected. Management has been responsive to the issues raised and has taken appropriate measures to address
the areas for improvement that have been highlighted. The issues raised were mainly operational and have negligible
impact on the operational results of the Group.
The monitoring, review and reporting arrangements in place provide reasonable assurance that the structure of control
and its operations are appropriate to the Groups operations and that risks are at an acceptable level throughout the
Groups business. Such arrangements, however, do not eliminate the possibility of human error, deliberate circumvention
of control procedures by employees and others or the occurrence of unforeseen circumstances.
The Board recognises the need for the risk management and internal control system to be subject to periodic review
in line with the growth and dynamics of the Group. To this end, the Board remains committed towards striving for
continuous improvement to put in place appropriate action plans where necessary, to further enhance the risk
management and internal control system of the Group.
REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS
As required by Paragraph 15.23 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the
external auditors have reviewed this Statement on Risk Management and Internal Control. Their limited assurance
review was performed in accordance with Recommended Practice Guide (RPG) 5 (Revised) issued by the Malaysian
Institute of Accountants. RPG 5 (Revised) does not require the external auditors to form an opinion on the adequacy
and effectiveness of the risk management and internal control systems of the Group. Based on the review, the external
auditors have reported to the Board that nothing has come to their attention that causes them to believe that the
statement is inconsistent with their understanding of the processes adopted by the Board in reviewing the adequacy
and integrity of the risk management and internal control system within the Group.
CONCLUSION
The Board has received assurance from the senior management that the Groups risk management and internal control
system is operating adequately and satisfactorily, in all material aspects, based on the risk management and internal
control system of the Group. The Board is of the view that the risk management and internal control system in place
for the year under review and up to the date of the issuance of the financial statements is adequate and effective to
safeguard the shareholders investment, the interests of customers, regulators and employees, and the Groups assets.

STATEMENT OF DIRECTORS
RESPONSIBILITY IN RESPECT OF
THE ANNUAL AUDITED FINANCIAL STATEMENTS
The Directors are required by the Companies Act 1965 (CA) to prepare financial statements for each financial year
which have been made out in accordance with the requirements of the applicable approved Malaysian Financial
Reporting Standards, International Financial Reporting Standards, the provisions of the CA and the Main Market Listing
Requirements of Bursa Malaysia Securities Berhad.
The Directors are responsible for ensuring that the annual audited financial statements of the Group and the Company
are prepared with reasonable accuracy from the accounting records of the Group and the Company so as to give a true
and fair view of the state of affairs of the Group and the Company at the end of the financial year, and of the results and
cash flows of the Group and the Company for the financial year.
In preparing the annual audited financial statements, the Directors have:

adopted appropriate and relevant accounting policies which are consistently applied;
made judgements and estimates that are reasonable and prudent; and
prepared the audited financial statements on a going concern basis.
The Directors are also responsible for taking such steps as are reasonably open to them to safeguard the assets of the
Group and the Company to prevent and detect fraud and other irregularities.

FINANCIAL
STATEMENTS
Directors Report 37
Statements Of Financial Position 41
Statements Of Profit Or Loss And 43

Other Comprehensive Income
Consolidated Statement Of 45
Changes In Equity
Company Statement Of Changes 46

In Equity
Statements Of Cash Flows 47
Notes To The Financial 49

Statements
Supplementary Information 105
Statement By Directors 106
Statutory Declaration 107
Independent Auditors Report 108

DIRECTORS REPORT
The Directors have pleasure in submitting their annual report together with the audited financial statements of the
Group and of the Company for the financial year ended 31 December 2016.
PRINCIPAL ACTIVITIES
The principal activities of the Company are investment holding and provision of management services.
The information on the name, place of incorporation, principal activities, and percentage of issued share capital held by
the holding company in each subsidiary is as disclosed in Note 7 to the financial statements.
RESULTS
The results of the Group and of the Company for the financial year are as follows:
Group Company
RM000 RM000
Profit before taxation 72,519 79,737

Tax credit 10,159 0
Net profit for the financial year 82,678 79,737
In the opinion of the Directors, the results of operations of the Group and of the Company during the financial year have
not been substantially affected by any item, transaction or event of a material and unusual nature other than the gain
on disposal of subsidiary, write back of impairment of property, plant and equipment and write back of impairment of
investment in subsidiary as disclosed in the financial statements.
DIVIDENDS
On 27 February 2017, the Directors declared an interim single-tier dividend of 10 sen per share on 210,000,000 ordinary
shares of RM1 each, amounting to RM21,000,000 in respect of the financial year ended 31 December 2016, paid on
24 March 2017 and this has not been included as a liability in the financial statements.
The Directors do not recommend any final dividends in respect of the current financial year.
RESERVES AND PROVISIONS
There were no material transfers to or from reserves and provisions during the financial year other than as disclosed in
the financial statements.

DIRECTORS REPORT
(Contd)
DIRECTORS
The Directors of the Company in office during the financial year and during the period from the end of the financial year
to the date of this report are:
Y.A.M. Tengku Puteri Seri Kemala Pahang Tengku Aishah (appointed on 3.1.2017)
Dato Sri Ng Ah Chai (appointed on 15.11.2016)
Dato Abdul Rashid Bin Mat Amin (appointed on 15.11.2016)
Cheam Tow Yong (appointed on 15.11.2016)
Kajendra A/L Pathmanathan (appointed on 25.2.2016)
Dato Mohd Hanif Bin Sher Mohamed (resigned on 16.11.2016)
Krishnan A/L Periyasamy (resigned on 16.11.2016)
Low Kim Seng (resigned on 16.11.2016)
Rozi Binti Baharudin (appointed on 25.2.2016 and resigned on 16.11.2016)
Lt. Gen. (R) Dato Seri Mohamed Daud Bin Abu Bakar (retired on 26.5.2016)
Dato Dr. Amarjit Singh A/L Santokh Singh (retired on 26.5.2016)
In accordance with Article 88 of the Companys Articles of Association, Dato Sri Ng Ah Chai, Dato Abdul Rashid Bin
Mat Amin, Cheam Tow Yong and Y.A.M. Tengku Puteri Seri Kemala Pahang Tengku Aishah Binti Sultan Haji Ahmad Shah,
who were appointed during the period, retire and being eligible, offer themsleves for re-election at the forthcoming
Annual General Meeting.
DIRECTORS BENEFITS
During and at the end of the financial year, no arrangement subsisted to which the Company was a party, being
arrangements with the object or objects of enabling Directors of the Company to acquire benefits by means of the
acquisition of shares in, or debentures of, the Company or any other body corporate.
Since the end of the previous financial year, none of the Directors of the Company has received or become entitled to
receive any benefit (other than the benefit included in the aggregate of emoluments received or due and receivable by
Directors as disclosed in Note 26 to the financial statements or the fixed salary of a full-time employee of the Company)
by reason of a contract made by the Company or a related corporation with the Director or with a firm of which he or she
is a member, or with a company in which he or she has a substantial financial interest except for any benefit which may
be deemed to have arisen by virtue of the transactions between the Company and certain companies in which certain
Directors of the Company are also Directors and/or shareholders as disclosed in Note 29 to the financial statements.

DIRECTORS REPORT
(Contd)
DIRECTORS INTERESTS
The interests in shares in the Company of those who were Directors at the end of the financial year according to the
Register of Directors Shareholdings kept by the Company under Section 59 of the Companies Act, 2016 are as follows:
Shares Held in the Company

Number of ordinary shares of RM1* each
At At
1.1.2016 Bought Sold 31.12.2016
Direct interest
Dato Sri Ng Ah Chai 0 119,218,055 0 119,218,055
Cheam Tow Yong 0 160,000 0 160,000
None of the other Directors in office at the end of the financial year held shares or had beneficial interest in the shares
of the Company or its related corporation during or at the beginning and end of the financial year.
* Upon effective of the Companies Act, 2016 on 31 January 2017, the ordinary shares do not have any par value.
INDEMNITY AND INSURANCE FOR DIRECTORS AND OFFICERS
The Company maintains Directors & Officers liability insurance for purposes of Section 289 of the Companies Act,
2016, throughout the year, amounting to RM10,000,000, which provides appropriate insurance cover for the Directors
and officers of the Company and its subsidiaries. The amount of insurance premium paid during the year amounted to
RM17,100 (excluding goods and service tax and stamp duty).
OTHER STATUTORY INFORMATION
Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps:
(a) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of
allowance for doubtful debts and satisfied themselves that no known bad debts need to be written off and that
adequate allowance had been made for doubtful debts; and
(b) to ensure that any current assets which were unlikely to be realised in the ordinary course of business including
the value of current assets as shown in the accounting records of the Group and of the Company had been written
down to an amount which the current assets might be expected so to realise.
At the date of this report, the Directors are not aware of any circumstances:
(a) which would require the writing off of bad debts or render the amount of the allowance for doubtful debts in the
financial statements of the Group and of the Company inadequate to any substantial extent; or
(b) which would render the values attributed to current assets in the financial statements of the Group and of the
Company misleading; or
(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group
and of the Company misleading or inappropriate; or
(d) not otherwise dealt with in this report or the financial statements of the Group and of the Company which would
render any amount stated in the financial statements misleading.

DIRECTORS REPORT
(Contd)
At the date of this report, there does not exist:
(a) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year
which secures the liability of any other person; or
(b) any contingent liability of the Group and of the Company which has arisen since the end of the financial year.
No contingent or other liability has become enforceable, or is likely to become enforceable, within the period of twelve
months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability
of the Group and of the Company to meet their obligations when they fall due.
In the opinion of the Directors, no item, transaction or event of a material and unusual nature has arisen in the interval
between the end of the financial year and the date of this report which is likely to affect substantially the results of
operations of the Group and of the Company in the financial year in which this report is made.
AUDITORS
The auditors, Messrs. Deloitte PLT, have indicated their willingness to continue in office.
AUDITORS REMUNERATION
The amount paid as remuneration of the auditors for the financial year ended 31 December 2016 is as disclosed in Note
22 to the financial statements.
Signed on behalf of the Board of Directors in accordance with a resolution dated 30 March 2017.
DATO SRI NG AH CHAI Kajendra A/L Pathmanathan

DIRECTOR DIRECTOR

STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2016
Group Company
Note 2016 2015 2016 2015
RM000 RM000 RM000 RM000
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 6 413,293 402,018 9 65

Investment in subsidiaries 7 0 0 50,075 5,066
Amount due from subsidiaries 8 0 0 367,244 343,976
Deferred tax assets 9 10,189 0 0 0
423,482 402,018 417,328 349,107
CURRENT ASSETS
Inventories 10 40,178 52,251 0 0

Receivables, deposits
and prepayments 11 58,920 69,717 137 78
Amount due from subsidiaries 8 0 0 15,423 33,130
Tax recoverable 576 823 320 317
Cash and bank balances 36,436 11,611 193 216
136,110 134,402 16,073 33,741
TOTAL ASSETS 559,592 536,420 433,401 382,848

STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2016 (Contd)
Group Company
Note 2016 2015 2016 2015
RM000 RM000 RM000 RM000
EQUITY AND LIABILITIES
CAPITAL AND RESERVES

ATTRIBUTABLE
TO OWNERS
OF THE COMPANY
Share capital 13 210,000 210,000 210,000 210,000

Reserves 14 165,766 82,209 165,003 85,349
TOTAL EQUITY 375,766 292,209 375,003 295,349
NON-CURRENT LIABILITIES
Employee defined benefit plan 15 12,542 12,044 574 418

Trade and other payables 18 1,041 0 0 0
Amount due to former immediate
holding company 17 44,035 46,694 44,035 46,694
57,618 58,738 44,609 47,112
CURRENT LIABILITIES
Trade and other payables 18 84,593 100,764 1,186 4,517

Amount due to subsidiaries 8 0 0 3,426 3,426
Amount due to former immediate
holding company 17 9,177 4,311 9,177 4,311
Derivative financial instruments 19 267 79 0 0
Borrowings 16 32,171 80,319 0 28,133
126,208 185,473 13,789 40,387
TOTAL LIABILITIES 183,826 244,211 58,398 87,499
TOTAL EQUITY AND LIABILITIES 559,592 536,420 433,401 382,848

STATEMENTS OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2016
Group Company
Note 2016 2015 2016 2015
RM000 RM000 RM000 RM000
Revenue 20 324,096 354,988 3,494 2,955

Changes in inventories of finished goods
and work-in-progress 1,172 490 0 0
Raw materials and consumables used (179,738) (194,576) 0 0
Purchase of packing materials (2,476) (3,975) 0 0
Staff costs 21 (33,599) (33,806) (2,447) (2,025)
Hiring of vehicles and equipment (3,907) (4,031) 0 0
Shipping and handling expenses (19,607) (21,525) 0 0
Upkeep, repairs and maintenance of assets (15,956) (15,645) (12) (78)
Utilities (26,924) (27,340) 0 0
Depreciation of property, plant and equipment (14,973) (14,961) (56) (70)
Impairment of property, plant and equipment (7,809) 0 0 0
Other expenses (11,957) (15,523) (1,262) (785)
Write back of impairment of
investment in subsidiary 0 0 45,009 0
Gain on disposal of subsidiary 35,000 0 35,000 0
Write back of impairment of property,
plant and equipment 28,134 0 0 0
Other operating income 5,911 1,645 0 0
Profit/(Loss) from operations 22 77,367 25,741 79,726 (3)

Finance costs 23 (4,900) (7,104) (33) (34)
Finance income 23 52 6 44 4
Profit/(Loss) before taxation 72,519 18,643 79,737 (33)

Tax credit 24 10,159 0 0 0
Net profit/(loss) for the financial year 82,678 18,643 79,737 (33)

STATEMENTS OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2016 (Contd)
Group Company
Note 2016 2015 2016 2015
RM000 RM000 RM000 RM000
Other comprehensive income/(loss)
Items that will not be reclassified

to profit or loss:
Actuarial gain/(loss) on employee
defined benefit plan 15 878 0 (83) 0
Items that may be reclassified

subsequently to profit or loss:
Exchange differences on
translating foreign subsidiary 1 (1) 0 0
Other comprehensive income/(loss)

for the financial year 879 (1) (83) 0
Total comprehensive income/(loss)

for the financial year 83,557 18,642 79,654 (33)
Net profit/(loss) attributable to

owners of the Company 82,678 18,643 79,737 (33)
Total comprehensive income/(loss)

attributable to owners of the Company 83,557 18,642 79,654 (33)
Basic earnings per share (sen) 25 39.37 8.88

CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
Attributable to owners of the Company

Issued and fully paid
ordinary shares of
RM1 each Non-distributable Distributable
Foreign
Number Nominal Share currency Retained Total
of shares value premium reserve earnings equity
000 RM000 RM000 RM000 RM000 RM000
At 1 January 2015 210,000 210,000 5,866 (43) 57,744 273,567
Total comprehensive income/(loss):

- Net profit for the financial year 0 0 0 0 18,643 18,643
- Exchange difference on
translating foreign subsidiary 0 0 0 (1) 0 (1)
At 31 December 2015 210,000 210,000 5,866 (44) 76,387 292,209
At 1 January 2016 210,000 210,000 5,866 (44) 76,387 292,209
Total comprehensive income:

- Net profit for the financial year 0 0 0 0 82,678 82,678
- Actuarial gain on employee
defined benefit plan 0 0 0 0 878 878
- Exchange difference on translating
foreign subsidiary 0 0 0 1 0 1
At 31 December 2016 210,000 210,000 5,866 (43) 159,943 375,766

COMPANY STATEMENT
OF CHANGES IN EQUITY
Issued and fully paid

ordinary shares of Non-
RM1 each distributable Distributable
Number Nominal Share Retained Total
of shares value premium earnings equity
000 RM000 RM000 RM000 RM000
At 1 January 2015 210,000 210,000 5,866 79,516 295,382
Total comprehensive loss:

- Net loss for the financial year 0 0 0 (33) (33)
At 31 December 2015 210,000 210,000 5,866 79,483 295,349
At 1 January 2016 210,000 210,000 5,866 79,483 295,349
Total comprehensive income/(loss):

- Net profit for the financial year 0 0 0 79,737 79,737
- Actuarial loss on employee
defined benefit plan 0 0 0 (83) (83)
At 31 December 2016 210,000 210,000 5,866 159,137 375,003

STATEMENTS OF CASH FLOWS
Group Company
2016 2015 2016 2015
RM000 RM000 RM000 RM000
CASH FLOWS FROM/(USED IN)

OPERATING ACTIVITIES
Net profit/(loss) for the financial year 82,678 18,643 79,737 (33)
Adjustments for:
Depreciation of property, plant and equipment 14,973 14,961 56 70
Gain on disposal of subsidiary (35,000) 0 (35,000) 0
Loss on disposal of property, plant and equipment 1,517 3 0 0
Write off of:
- property, plant and equipment 0 1,089 0 0
- inventories 135 87 0 0
Allowance for/(Write back of allowance for)
inventories obsolescence 6,833 (633) 0 0
Finance costs 4,900 7,104 33 34
Finance income (52) (6) (44) (4)
Provision for employee defined benefit plan 1,513 1,450 81 78
Fair value loss/(gain) on derivative financial instruments 188 (1,249) 0 0
Unrealised (gain)/loss on foreign exchange (950) 2,343 (11) (63)
Tax credit (10,159) 0 0 0
Write back of impairment of investment
Investment in subsidiary 0 0 (45,009) 0
Write back of impairment of property, plant and equipment (28,134) 0 0 0
Allowance for/(Reversal of allowance for)
doubtful debts - net:
- subsidiary 0 0 (25) 0
- trade receivables 404 0 0 0
Impairment of property, plant and equipment 7,809 0 0 0
46,655 43,792 (182) 82

Changes in working capital:
(Increase)/Decrease in inventories 5,105 (4,562) 0 0
(Increase)/Decrease in receivables 11,341 (12,535) (59) 20
Increase/(Decrease) in payables (14,765) 22,308 (2,950) 3,779
48,336 49,003 (3,191) 3,881

Employee defined benefit paid (137) (362) (8) (49)
Tax refund/(paid) 218 (344) (3) 2
Net cash flows generated from/

(used in) operating activities 48,417 48,297 (3,202) (3,834)

STATEMENTS OF CASH FLOWS
Group Company
Note 2016 2015 2016 2015
RM000 RM000 RM000 RM000
CASH FLOWS (USED IN)/FROM

INVESTING ACTIVITIES
Purchase of property, plant and equipment 6 (7,489) (17,205) 0 0

Interest received 52 6 0 4
Proceeds from disposal of a subsidiary 35,000 0 35,000 0
(Advance to)/Repayment from subsidiary 0 0 (3,661) 17,454
Proceeds from disposal of property,
plant and equipment 49 2 0 0
Net cash flows generated from/

(used in) investing activities 27,612 (17,197) 31,339 17,458
CASH FLOWS (USED IN)/FROM

FINANCING ACTIVITIES
Repayment of:
- hire purchase obligations (30) (36) (30) (36)
- term loans (28,453) (19,153) (28,103) (18,552)
Interest paid (3,080) (5,284) (33) (2,709)
Net repayment of bankers acceptances (16,843) (5,238) 0 0
Proceeds from/(Repayment of):
- overdraft facility (1,407) 3,689 0 0
- foreign currency trade financing (415) (201) 0 0
- revolving credit (1,000) 0 0 0
Net cash flows used in financing activities (51,228) (26,223) (28,166) (21,297)
NET INCREASE/(DECREASE) IN
CASH AND CASH EQUIVALENTS 24,801 4,877 (29) (5)
CASH AND CASH EQUIVALENTS

AT BEGINNING OF THE FINANCIAL YEAR 10,682 5,799 38 43
EFFECTS OF EXCHANGE RATE CHANGES 0 6 0 0
CASH AND CASH EQUIVALENTS

AT END OF THE FINANCIAL YEAR 12 35,483 10,682 9 38

NOTES TO THE FINANCIAL STATEMENTS
1 GENERAL INFORMATION
The Company is a public limited liability company, which is incorporated and domiciled in Malaysia, and listed on
the Main Market of Bursa Malaysia Securities Berhad.
The principal activities of the Company are investment holding and provision of management services.
The information on the name, place of incorporation, principal activities, and percentage of issued share capital
held by the holding company in each subsidiary is as disclosed in Note 7.
The address of the registered office is No.1, Block C, Jalan Indah 2/6, Taman Indah, Batu 11 Cheras, 43200
Selangor Darul Ehsan.
The addresses of the principal place of business are as follows:
(a) No.1, Block C, Jalan Indah 2/6, Taman Indah, Batu 11 Cheras, 43200 Selangor Darul Ehsan;
(b) Lot 74, Kawasan Perindustrian Gebeng, 26080 Kuantan, Pahang Darul Makmur; and
(c) Lot 3, Kawasan Perindustrian Kechau Tui, 27100 Padang Tengku, Pahang Darul Makmur.

The financial statements have been approved for issue in accordance with a resolution of the Board of Directors
on 30 March 2017.
2 BASIS OF PREPARATION
The financial statements of the Group and of the Company have been prepared in accordance with the Malaysian
Financial Reporting Standards (MFRS), International Financial Reporting Standards and the requirements of the
Companies Act 1965 in Malaysia.
The financial statements have been prepared under historical cost basis except as disclosed in the accounting
policies in Note 3.
The preparation of financial statements in conformity with MFRS requires the use of certain critical accounting
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses
during the reported period. It also requires Directors to exercise their judgement in the process of applying
the accounting policies. Although these estimates and judgement are based on the Directors best knowledge
of current events and actions, actual results may differ. The areas involving a higher degree of judgement or
complexity, or area where assumptions and estimates are significant to the financial statements, are disclosed in
Note 4.

2 BASIS OF PREPARATION (CONTINUED)
2.1 Adoption of new and revised Malaysian Financial Reporting Standards
In the current financial year, the Group and the Company adopted all the new and revised MFRSs and
amendments to MFRSs issued by the Malaysian Accounting Standards Board that are effective for annual
financial periods beginning on or after 1 January 2016.
MFRS 14 Regulatory Deferral Accounts

Amendments to MFRS 10, Investment Entities: Applying the Consolidation Exception
MFRS 12 and MFRS 128
Amendments to MFRS 11 Accounting for Acquisitions of Interests in Joint Operations
Amendments to MFRS 101 Disclosure Initiative
Amendments to MFRS 116 Clarification of Acceptable Methods of Depreciation and Amortisation
and MFRS 138
Amendments to MFRS 127 Equity Method in Separate Financial Statements
Annual Improvements to MFRSs 2012 2014 Cycle
The adoption of these new and revised MFRSs and amendments to MFRSs did not result in significant
changes in the accounting policies of the Group and of the Company and had no significant effect on
the financial performance or position of the Group and of the Company.
2.2 Standards and Amendments in Issue but Not Yet Effective
At the date of authorisation for issue of these financial statements, the new and revised MFRSs and
amendments to MFRSs which were in issue but not yet effective and not early adopted by the Group and
the Company are as listed below:
MFRS 9 Financial Instruments (IFRS 9 issued by IASB in July 2014)2

MFRS 15 Revenue from Contract with Customers2
MFRS 16 Leases3
Amendments to MFRS 2 Clarification and Measurement of Share-based Payment Transactions1
Amendments to MFRS 15 Clarifications to MFRS 15 Revenue from Contracts with Customers2
Amendments to MFRS 10 Sale or Contribution of Assets between an Investor and its Associate or
and MFRS 128 Joint Venture4
Amendments to MFRS 107 Disclosure Initiative1
Amendments to MFRS 112 Recognition of Deferred Tax Assets for Unrealised Losses1
Amendments to MFRS 140 Transfers of Investment Property2
Annual Improvements to MFRSs 2014 - 2016 Cycle1
Annual Improvements to MFRSs 2014 - 2016 Cycle2
1
Effective for annual periods beginning on or after 1 January 2017, with earlier application permitted.
2
3
4
Effective date deferred to a date to be determine and announced, with earlier applications still permitted.
The Directors anticipate that the abovementioned MFRSs and amendments to MFRSs will be adopted in
the annual financial statements of the Group and of the Company when they become effective and that
the adoption of these standards will have no material impact on the financial statements of the Group
and of the Company in the period of initial application except as disclosed below:

2.2 Standards and Amendments in Issue but Not Yet Effective (continued)
MFRS 9 Financial Instruments
MFRS 9 (IFRS 9 issued by IASB in November 2009) introduced new requirements for the classification and
measurement of financial assets. MFRS 9 (IFRS 9 issued by IASB in October 2010) includes requirements
for the classification and measurement of financial liabilities and for de-recognition, and in February
2016, the new requirements for general hedge accounting was issued by MASB. Another revised
version of MFRS 9 was issued by MASB - MFRS 9 (IFRS 9 issued by IASB in July 2016) mainly to include
(a) impairment requirements for financial assets and (b) limited amendments to the classification and
measurement requirements by introducing a fair value through other comprehensive income (FVTOCI)
measurement category for certain simple debt instruments.
Key requirements of MFRS 9:
a) All recognised financial assets that are within the scope of MFRS 139 Financial Instruments:
Recognition and Measurement are required to be subsequently measured at amortised cost or
fair value. Specifically, debt investments that are held within a business model whose objective is
to collect the contractual cash flows, and that have contractual cash flows that are solely payments
of principal and interest on the principal outstanding are generally measured at amortised cost
at the end of subsequent accounting periods. Debt instruments that are held within a business
model whose objective is achieved both by collecting contractual cash flows and selling financial
assets, and that have contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount outstanding, are
measured at FVTOCI. All other debt investments and equity investments are measured at their fair
value at the end of subsequent accounting periods. In addition, under MFRS 9, entities may make
an irrevocable election to present subsequent changes in the fair value of an equity investment
(that is not held for trading) in other comprehensive income, with only dividend income generally
recognised in profit or loss.
b) With regard to the measurement of financial liabilities designated as at fair value through profit
or loss, MFRS 9 requires that the amount of change in the fair value of the financial liability that
is attributable to changes in the credit risk of that liability is presented in other comprehensive
income, unless the recognition of the effects of changes in the liabilitys credit risk in other
comprehensive income would create or enlarge an accounting mismatch in profit or loss. Changes
in fair value attributable to a financial liabilitys credit risk are not subsequently reclassified to profit
or loss. Under MFRS 139, the entire amount of the change in the fair value of the financial liability
designated as fair value through profit or loss is presented in profit or loss.
c) In relation to the impairment of financial assets, MFRS 9 requires an expected credit loss model,
as opposed to an incurred credit loss model under MFRS 139. The expected credit loss model
requires an entity to account for expected credit losses and changes in those expected credit losses
at each reporting date to reflect changes in credit risk since initial recognition. In other words, it is
no longer necessary for a credit event to have occurred before credit losses are recognised.
d) The new general hedge accounting requirements retain the three types of hedge accounting
mechanisms currently available in MFRS 139. Under MFRS 9, greater flexibility has been introduced
to the types of transactions eligible for hedge accounting, specifically broadening the types of
instruments that qualify for hedging instruments and the types of risk components of non-financial
items that are eligible for hedge accounting. In addition, the effectiveness test has been overhauled
and replaced with the principle of an economic relationship. Retrospective assessment of hedge
effectiveness is also no longer required. Enhanced disclosure requirements about an entitys risk
management activities have also been introduced.

MFRS 9 Financial Instruments (continued)
Key requirements of MFRS 9: (continued)
The Directors do not anticipate that the application of MFRS 9 in the future to have a material impact on
amounts reported in respect of the Groups and the Companys financial assets and financial liabilities.
However, it is not practicable to provide a reasonable estimate of the effect of MFRS 9 until the Group
completes a detailed review.
MFRS 15 Revenue from Contracts with Customers
MFRS 15 establishes a single comprehensive model for entities to use in accounting for revenue arising
from contracts with customers. MFRS 15 will supersede the current revenue recognition guidance
including MFRS 118 Revenue, MFRS 111 Construction Contracts and the related Interpretations when it
becomes effective.
The core principle of MFRS 15 is that an entity should recognise revenue to depict the transfer of
promised goods or services to customers in an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services. Specifically, the Standard introduces a
5-step approach to revenue recognition:
a) Step 1: Identify the contract(s) with a customer.

b) Step 2: Identify the performance obligations in the contract.
c) Step 3: Determine the transaction price.
d) Step 4: Allocate the transaction price to the performance obligations in the contract.
e) Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation.
Under MFRS 15, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e.
when control of the goods or services underlying the particular performance obligation is transferred
to the customer. Far more prescriptive guidance has been added in MFRS 15 to deal with specific
scenarios. Furthermore, extensive disclosures are required by MFRS 15.
The Directors do not anticipate the application of MFRS 15 in the future to have a material impact on the
amounts reported and disclosures made in these financial statements. However, it is not practicable to
provide a reasonable estimate of the effect of MFRS 15 until the Group completes a detailed review.
MFRS 16 Leases

MFRS 16 specifies how an MFRS reporter will recognise, measure, present and disclose leases. The
standard provides a single lessee accounting model, requiring lessees to recognise assets and liabilities
for all leases unless the lease term is 12 months or less or the underlying asset has a low value. Lessors
continue to classify leases as operating or finance, with MFRS 16s approach to lessor accounting
substantially unchanged from its predecessor, MFRS 117.
At lease commencement, a lessee will recognise a right-of-use asset and a lease liability. The right-of-
use asset is treated similarly to other non-financial assets and depreciated accordingly and the liability
accrues interest. The lease liability is initially measured at the present value of the lease payments
payable over the lease term, discounted at the rate implicit in the lease if that can be readily determined.
If that rate cannot be readily determined, the lessees shall use their incremental borrowing rate.

MFRS 16 Leases (continued)
The Directors do not anticipate the application of MFRS 16 in the future to have a material impact on the
amounts reported and disclosures made in these financial statements. However, it is not practicable to
provide a reasonable estimate of the effect of MFRS 16 until the Group completes a detailed review.
3 SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements of the Group and of the Company have been prepared under the historical cost
convention except as disclosed in the significant accounting policies. Historical cost is generally based on the fair
value of the consideration given in exchange for assets.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date, regardless of whether that price is directly observable or
estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group and
the Company take into account the characteristics of the asset or liability at the measurement date. Fair value for
measurement and/or disclosure purposes in these financial statements is determined on such a basis, except
for share-based payment transactions that are within the scope of MFRS 2, leasing transaction that are within the
scope of MFRS 117, and measurements that have some similarities to fair value but are not fair value, such as net
realisable value in MFRS 102 Inventories or value in use in MFRS 136 Impairment of Assets.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on
the degree to which the inputs to the fair value measurements are observable and the significance of the inputs
to the fair value measurement in its entirely, which are described as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity
can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset
or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.
Unless otherwise stated, the following accounting policies have been applied consistently in dealing with items
that are considered material in relation to the financial statements.
3.1 Economic Entities in the Group
(a) Subsidiaries and Basis of Consolidation
The consolidated financial statements incorporate the financial statements of the Company and all
its subsidiaries controlled by the Group. Control is achieved when the Group:
has power over the investee;
is exposed, or has rights, to variable returns from its involvement with the investee; and
has the ability to use its power to affect its returns.

3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.1 Economic Entities in the Group (continued)
(a) Subsidiaries and Basis of Consolidation (continued)
The Group reassesses whether or not it controls an investee if facts and circumstances indicate that
there are changes to one or more of the three elements of control listed above.
When the Group has less than a majority of the voting rights of an investee, it has power over the
investee when the voting rights are sufficient to give it the practical ability to direct the relevant
activities of the investee unilaterally. The Group considers all relevant facts and circumstances in
assessing whether or not the Groups voting rights in an investee are sufficient to give it power,
including:
the size of the Groups holding of voting rights relative to the size and dispersion of holdings
of the other vote holders;
potential voting rights held by the Group, other vote holders or other parties;
rights arising from other contractual arrangements; and
any additional facts and circumstances that indicate that the Group has, or does not have,
the current ability to direct the relevant activities at the time that decisions need to be made,
including voting patterns at previous shareholders meetings.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and
ceases when the Group loses control of the subsidiary. Specifically, income and expenses of a
subsidiary acquired or disposed of during the year are included in the consolidated statement
of profit or loss and other comprehensive income from the date the Group gains control until the
date when the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the owners
of the Group and to the non-controlling interests. Total comprehensive income of subsidiaries is
attributed to the owners of the Group and to the non-controlling interests even if this results in the
non-controlling interests having a deficit balance.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their
accounting policies into line with those used by other members of the Group.
All intra-group assets and liabilities, equity, income and expenses and cash flows relating to
transactions between members of the Group are eliminated in full on consolidation.
Changes in the Groups ownership interests in subsidiaries that do not result in the Group losing
control are accounted for as equity transactions. The carrying amounts of the Groups interests
and the non-controlling interests are adjusted to reflect the changes in their relative interests in
the subsidiaries. Any difference between the amount by which the non-controlling interests are
adjusted at the fair value of the consideration paid or received is recognised directly in equity and
attributed to owners of the parent.

(a) Subsidiaries and Basis of Consolidation (continued)
When the Group loses control of a subsidiary, a gain or loss is recognised and is calculated as the
difference between:
the aggregate of the fair value of the consideration received and the fair value of any retained
interest; and
the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiaries
and any non-controlling interests. All amounts previously recognised in other comprehensive
income in relation to the subsidiary are accounted for as if the Group had directly disposed of
the relevant assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred
to another category of equity as specified/permitted by applicable MFRSs). The fair value of
any investment retained in the former subsidiary at the date when control is lost is regarded
as the fair value on initial recognition for subsequent accounting under MFRS 139 Financial
Instruments: Recognition and Measurement or, when applicable, the cost on initial recognition
of an investment in an associate or joint venture.
In the Companys separate financial statements, investments in subsidiaries are stated at cost less
accumulated impairment losses. On disposal of such investments, the difference between net
disposal proceeds and their carrying amounts is included in profit or loss.
(b) Business Combination
Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The
consideration transferred in a business combination is measured at fair value, which is calculated
as the sum of the acquisition date fair values of assets transferred by the Group, liabilities incurred
by the Group to the former owners of the acquiree and equity instruments issued by the Group in
exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as
incurred.
At acquisition date, the identifiable assets acquired and liabilities assumed are recognised at their
fair value, except that:
deferred tax assets or liabilities and liabilities or assets related to employee benefit
arrangements are recognised and measured in accordance with MFRS 112 Income Taxes and
MFRS 119 Employee Benefits respectively;
liabilities or equity instruments related to the share-based payment arrangements of the

acquiree or share-based payment arrangements of the Group entered into to replace share-
based payment arrangements of the acquiree are measured in accordance with MFRS 2
Share-based Payment at the acquisition date; and
assets (or disposal groups) that are classified as held for sale in accordance with MFRS 5 Non-
current Assets Held for Sale and Discontinued Operations are measured in accordance with
that Standard.

(b) Business Combination (continued)
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any
non-controlling interests in the acquiree, and the fair value of the acquirers previously held equity
interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable
assets acquired and liabilities. If, after reassessment, the net of the acquisition date amounts of
the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration
transferred, the amount of any non-controlling interests in the acquiree and the fair value of
the acquirers previously held equity interest in the acquiree (if any), the excess is recognised
immediately in profit or loss as a bargain purchase gain.
Where the consideration transferred by the Group in a business combination includes assets or
liabilities resulting from a contingent consideration arrangement, the contingent consideration is
measured at its acquisition date fair value. Changes in the fair value of the contingent consideration
that qualify as measurement period adjustments are adjusted retrospectively, with corresponding
adjustments against goodwill. Measurement period adjustments are adjustments that arise from
additional information obtained during the measurement period (which cannot exceed one year
from the acquisition date) about facts and circumstances that existed at the acquisition date.
The subsequent accounting for changes in the fair value of contingent consideration that do not
qualify as measurement period adjustments depends on how the contingent consideration is
classified. Contingent consideration that is classified as equity is not remeasured at subsequent
reporting dates and its subsequent settlement is accounted for within equity. Contingent
consideration that is classified as an asset or liability is remeasured at subsequent reporting dates
in accordance with MFRS 139 Financial Instruments: Recognition and Measurement or MFRS 137
Provisions, Contingent Liabilities and Contingent Assets, as appropriate, with the corresponding
gain or loss being recognised in profit or loss.
Where a business combination is achieved in stages, the Groups previously held interests in
the acquired entity are remeasured to fair value at the acquisition date and the resulting gain
or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior
to the acquisition date that have previously been recognised in other comprehensive income
are reclassified to profit or loss, where such treatment would be appropriate if that interest were
disposed of.
If the initial accounting for a business combination is incomplete by end of the reporting period
in which the combination occurs, the Group reports provisional amounts for the items of which
the accounting is incomplete. Those provisional amounts are adjusted during the measurement
period, or additional assets or liabilities are recognised, to reflect new information obtained about
facts and circumstances that existed as of the acquisition date that, if known, would have affected
the amounts recognised at that date.

3.2 Foreign Currencies
(a) Functional and Presentation Currency
Items included in the financial statements of each of the Groups entities are measured using
the currency of the primary economic environment in which the Groups entities operate (the
functional currency). The financial statements are presented in Ringgit Malaysia, which is the
Companys functional currency and the presentation currency of the financial statements.
(b) Transactions and Balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year-end exchange rates of monetary
assets and liabilities denominated in foreign currencies are recognised in profit or loss.
(c) Group Companies
Assets and liabilities of foreign subsidiaries are translated to Ringgit Malaysia at rates of exchange
ruling at the reporting date and the results of foreign subsidiaries are translated at the average rate
of exchange for the financial year. Exchange differences arising from the translation are recognised
as a separate component of equity.
On consolidation, exchange differences arising from the translation of the net investment in
foreign operations are recognised in other comprehensive income and accumulated in equity.
When a foreign operation is partially disposed of or sold, exchange differences that were recorded
in equity are recognised in profit or loss as part of the gain or loss on sale.
3.3 Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any impairment
losses. The cost of an item of property, plant and equipment initially recognised includes its purchase
price and any cost that is directly attributable to bringing the asset to the location and condition
necessary for it to be capable of operating in the manner intended by management.
Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to
the Group and the Company and the cost of the item can be measured reliably. The carrying amount
of the replaced part is de-recognised. All other repairs and maintenance are charged to profit or loss
during the financial year in which they are incurred.
Leasehold land classified as finance lease is amortised in equal instalments over the period of the
respective leases that range from 49 to 102 years. Capital work-in-progress included in property, plant
and equipment are not depreciated as these assets are not yet available for use. Depreciation of these
assets, on the same basis of other property, plant and equipment, commences when the assets are
ready for their intended used.

3.3 Property, Plant and Equipment (continued)
Property, plant and equipment are depreciated on the straight-line basis to write off the costs of the
assets to their estimated residual values over their estimated useful lives. The annual depreciation rates
are as follows:
%
Buildings 2.0 - 5.0
Plant and machinery 3.0 - 33.3
Furniture, fittings, office renovation and equipment 10.0 - 33.3
Motor vehicles 20.0
At the end of each reporting period, the useful lives and depreciation method of an asset are reviewed
and the effects of any changes are recognised prospectively.
A gain or loss arising from the disposal of an asset is determined as the difference between the estimated
net disposal proceeds and the carrying amount of the asset, and is recognised in profit or loss.
3.4 Assets under Hire-Purchase Arrangements
Assets acquired under hire-purchase arrangements are capitalised in the financial statements and the
corresponding obligations treated as liabilities. Finance charges are allocated to profit or loss to give a
constant periodic rate of interest on the remaining hire-purchase liabilities.
3.5 Inventories
Inventories are stated at the lower of cost and net realisable value.
The cost of raw materials, work-in-progress, finished goods and spares and consumables are determined
using the weighted average method. The cost of raw materials and spares and consumables comprise
the original purchase price plus the cost incurred in bringing the inventories to their present location
and condition. The costs of finished goods and work-in-progress comprise raw materials, direct labour,
other direct costs and an appropriate proportion of production overheads.
Net realisable value is the estimated selling price in the ordinary course of business less the costs of
completion and applicable variable selling expenses.
3.6 Non-current Assets Held for Sale
Non-current assets are classified as assets held for sale when their carrying amount is to be recovered
principally through a sale transaction and a sale is considered highly probable. They are stated at the
lower of carrying amount and fair value less costs to sell.
3.7 Financial Guarantee Contracts

Financial guarantee contracts are contract that require the Group or Company to make specified
payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment
when due.

3.7 Financial Guarantee Contracts (continued)
Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs.
Subsequent to initial recognition, financial guarantee contracts are recognised as income in profit or
loss over the period of the guarantee. If the debtor fails to make payment relating to financial guarantee
contract when it is due and the Group or Company, as the issuer, is required to reimburse the holder
for the associated loss, the liability is measured at the higher of the best estimate of the expenditure
required to settle the present obligation at the end of the reporting period and the amount initially
recognised less cumulative amortisation.
3.8 Provisions
Provisions for liabilities are recognised when the Group and the Company have a present legal
or constructive obligation as a result of a past event and it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation, and a reliable estimate of the
amount can be made. Provisions are reviewed at the end of each reporting period and adjusted to
reflect the current best estimate. Where the effect of the time value of money is material, the amount
of a provision is the present value of the expenditure expected to be required to settle the obligation.
3.9 Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,
which are assets that necessarily take a substantial period of time to get them ready for their intended
use or sale, are capitalised as part of the cost of those assets, until such time as the assets are substantially
ready for their intended use or sale.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the
extent that it is probable that some or all of the facilities will be drawn down. In this case, the fee is
deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some
or all of the facility will be drawn down, the fee is capitalised as pre-payment for liquidity services and
amortised over the period of the facility to which it relates.
The amount of borrowing costs eligible for capitalisation is determined based on actual interest incurred
on borrowings made specifically for the purpose of obtaining a qualifying asset and less any investment
income on the temporary investment of that borrowing.
All other borrowing costs are recognised as finance costs in profit or loss in the financial year in which
they are incurred.
3.10 Leases
Finance Lease - The Group as Lessee
Assets acquired under leases which transfer substantially all of the risks and rewards incident to ownership
of the assets are capitalised under property, plant and equipment. The assets and corresponding lease
obligations are recorded at their fair values or, if lower, at the present value of the minimum lease
payments of the leased assets at the inception of the respective leases.

3.10 Leases (continued)
Finance Lease - The Group as Lessee (continued)
Finance costs, which represent the differences between the total lease commitments and the fair values
of the assets acquired, are charged to profit or loss over the term of the relevant lease periods so as to
give a constant periodic rate of charge on the remaining balance of the obligations for each accounting
period.
Operating Lease - The Group as Lessee
All other leases which do not meet such criteria are classified as operating lease. Lease payments under
operating leases are recognised as an expense in profit or loss on the straight-line basis over the term
of the relevant lease.
3.11 Contingencies
A contingent liability or asset is a possible obligation or asset that arises from past events and whose
existence will be confirmed only by the occurrence or non-occurrence of uncertain future events not
wholly within the control of the Group and of the Company.
Contingent liabilities and assets are not recognised in the statements of financial position of the Group
and of the Company except for contingent liabilities assumed in a business combination of which the
fair value can be reliably measured.
3.12 Revenue Recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods or
rendering of services in the ordinary course of business.
(a) Sales of Goods
Sales of goods are recognised upon delivery of products and where the risks and rewards of
ownership have been passed to the customers, net of goods and service tax and discounts.
(b) Interest Income
Interest income is recognised on a time proportion basis, taking into account the principal
outstanding and the effective rate over the period to maturity.
(c) Rental Income
Revenue from rental of properties are recognised on an accrual basis unless collection is in doubt,
in which case it is recognised on receipt basis.
(d) Management Fees from Subsidiaries
Management fees from subsidiaries are recognised on an accrual basis.

3.13 Income Tax
Income tax for the year comprises current and deferred tax. Current tax is the expected amount of
income tax payable in respect of the taxable profit for the financial year and is measured using the tax
rates that have been enacted or substantively enacted at the end of the reporting period.
Deferred tax is recognised on temporary differences at the end of the reporting period between the
tax bases of assets and liabilities and their carrying amounts in the financial statements. In principle,
deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets
are recognised for all deductible temporary differences, unused tax losses and unused tax credits to
the extent that it is probable that future taxable profits will be available against which the deductible
temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax is not
recognised if the temporary difference arises from goodwill or from the initial recognition of an asset or
liability in a transaction which is not a business combination and at the time of the transaction, affects
neither the accounting profit nor taxable profits.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced
to the extent that it is no longer probable that sufficient future taxable profits will be available to allow all
or part of the asset to be recovered.
Deferred tax is measured at the tax rates that are expected to apply in the year when the asset is realised
or the liability is settled, based on tax rates that have been enacted or substantively enacted at the end of
the reporting period. Deferred tax is recognised in profit or loss, except when it arises from a transaction
which is recognised outside profit or loss (either in other comprehensive income or directly in equity),
in which case the deferred tax is also recognised outside profit or loss, or when it arises from a business
combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current
tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation
authority and the Group and the Company intend to settle the current tax assets and liabilities on a net
basis.
3.14 Goods and Service Tax (GST)
The output and input GST, payable to or recoverable from the authorities at reporting date is included
as part of receivables or payables in the statements of financial position.
3.15 Employee Benefits
(a) Short-term Employee Benefits
The Group and the Company recognise a liability and an expense for bonus provisions where
contractually obliged or where there is a past practice that has created a constructive obligation.
Wages, salaries, paid annual leave, sick leave, bonuses, and non-monetary benefits are accrued in
the financial year in which the associated services are rendered by employees of the Group and
of the Company.

3.15 Employee Benefits (continued)
(b) Post-employment Benefits
The Group and the Company have two post-employment benefit schemes in accordance with
local conditions and practices in the country in which they operate. These benefits plans are either
defined contribution or defined benefit plans.
A defined contribution plan is a pension plan under which the Group and the Company pay fixed
contributions into a separate entity (a fund) and will have no legal or constructive obligations to
pay further contributions if the fund does not hold sufficient assets to pay all employees benefits
relating to employee service in the current and prior periods.
Defined benefit plan is a pension plan that is not a defined contribution plan. Defined benefit
plan defines an amount of pension benefit that an employee will receive on retirement, usually
dependent on one or more factors such as age, years of service and compensation.
Defined contribution plan
The Group and the Company contribute to the Employees Provident Fund (EPF), the national
defined contribution plan. Contributions made to this defined contribution plan are charged to
profit or loss in the financial year to which they relate. Once the contributions have been paid,
the Group and the Company have no further payment obligations. Prepaid contributions are
recognised as an asset to the extent that a cash refund or a reduction in the future payments is
available.
Defined benefit plan - unfunded
The liability recognised in the statements of financial position in respect of defined benefit plan is
the present value of the defined benefit obligation at the end of the reporting period. The defined
benefit obligation is calculated annually by independent actuaries using the projected unit credit
method. The present value of the defined benefit obligation is determined by discounting the
estimated future cash outflows using interest rates of high-quality corporate bonds that are
denominated in Ringgit Malaysia, and that have terms to maturity approximating to the terms of
the related pension obligation.
The current service cost of the defined benefit plan reflects the increase in the defined benefit
obligation resulting from employee service in the current year. It is recognised in profit or loss
in employee benefit expense, except when included in the cost of an asset. Actuarial gains and
losses arising from experience adjustments and changes in actuarial assumptions are charged or
credited to other comprehensive income in the period in which they arise.
Past service costs are recognised immediately in profit or loss.

3.16 Impairment of Non-Financial Assets
The carrying amounts of assets are reviewed at each reporting period to determine whether there is
any indication of impairment. If such an indication exists, the assets recoverable amount is estimated.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit
exceeds its recoverable amount.
Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-
use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset for
which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount.
An impairment loss is recognised immediately in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating
unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying
amount does not exceed the carrying amount that would have been determined had no impairment
loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment
loss is recognised immediately in profit or loss.
3.17 Financial Instruments
Financial instruments are recognised in the statements of financial position when, and only when the
Group and the Company become parties to the contractual provisions of the financial instruments.
(a) Financial Assets
Financial assets are classified into the following specified categories: financial assets at fair value
through profit or loss (FVTPL), held-to-maturity investments, available-for-sale (AFS) financial
assets and loans and receivables. The classification depends on the nature and purpose of the
financial assets and is determined at the time of initial recognition.
(i) Effective Interest Method
The effective interest method is a method of calculating the amortised cost of a financial
asset and of allocating interest income over the relevant period. The effective interest rate is
the rate that exactly discounts estimated future cash receipts (including all transaction costs
and other premiums or discounts) through the expected life of the financial asset, or (where
appropriate) a shorter period, to the net carrying amount on initial recognition.

3.17 Financial Instruments (continued)
(a) Financial Assets (continued)
(ii) Financial Assets at FVTPL
Financial assets are classified as at FVTPL when the financial asset is either held for trading or
it is designated as at FVTPL.
A financial asset is classified as held for trading if:
it has been acquired principally for the purpose of selling it in the near term; or
on initial recognition it is part of a portfolio of identified financial instruments that the

Group and the Company manage together and have a recent actual pattern of short-
term profit-taking; or
it is a derivative that is not designated and effective as a hedging instrument.
A financial asset other than a financial asset held for trading may be designated as at FVTPL
upon initial recognition if:
such designation eliminates or significantly reduces a measurement or recognition

inconsistency that would otherwise arise; or
the financial asset forms part of a group of financial assets or financial liabilities or both,
which is managed and its performance is evaluated on a fair value basis, in accordance
with the Groups and the Companys documented risk management or investment
strategy, and information about the grouping is provided internally on that basis; or
it forms part of a contract containing one or more embedded derivatives, and MFRS
139 Financial Instruments: Recognition and Measurement permits the entire combined
contract (asset or liability) to be designated as at FVTPL.
Financial assets at FVTPL are stated at fair value, with any gains or losses arising on
remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss
incorporates any dividend or interest earned on the financial asset.
(iii) Loans and Receivables
Loans and receivables that have fixed or determinable payments that are not quoted in an
active market are classified as loans and receivables. Loans and receivables are measured
at amortised cost using the effective interest method, less any impairment. Interest income
is recognised by applying the effective interest rate, except for short-term receivables when
the recognition of interest would be immaterial.

(a) Financial Assets (continued)
(iv) Impairment of Financial Assets
Trade and other receivables and other financial assets carried at amortised cost
Financial assets, other than those at FVTPL, are assessed for indicators of impairment at
the end of each reporting period. Financial assets are considered to be impaired when
there is objective evidence that, as a result of one or more events that occur after the initial
recognition of the financial asset, the estimated future cash flows of the financial asset have
been affected.
Receivables assessed not to be impaired individually are, in addition, assessed for impairment
on a collective basis. Objective evidence of impairment for a portfolio of receivables could
include the Groups and the Companys past experience of collecting payments, an increase
in the number of delayed payments in the portfolio past the average credit period, as well as
observable changes in the national or global economic conditions that correlate with default
on receivables.
In respect of receivables carried at amortised cost, the amount of impairment loss recognised
is the difference between the assets carrying amount and the present value of estimated
future cash flows, discounted at the financial assets original effective interest rate.
The carrying amount of the financial asset is reduced by the impairment loss directly for
all financial assets with the exception of trade receivables, where the carrying amount is
reduced through the use of an allowance account. When a trade receivable is considered
uncollectible, it is written off against the allowance account. Subsequent recoveries of
amounts previously written off are credited against the allowance account. Changes in the
carrying amount of the allowance account are recognised in profit or loss.
(v) Derecognition of Financial Assets
The Group and the Company derecognise a financial asset only when the contractual rights to
the cash flows from the asset expire, or when they transfer the financial asset and substantially
all the risks and rewards of ownership of the asset to another entity. If the Group and the
Company neither transfer nor retain substantially all the risks and rewards of ownership
and continue to control the transferred asset, the Group and the Company recognise their
retained interest in the asset and an associated liability for amounts they may have to pay. If
the Group and the Company retain substantially all the risks and rewards of ownership of a
transferred financial asset, the Group and the Company continue to recognise the financial
asset and also recognise a collateralised borrowing for the proceeds received.

(b) Financial Liabilities and Equity Instruments
Debt and equity instruments are classified as either financial liabilities or as equity in accordance
with the substance of the contractual arrangement.
(i) Equity Instruments
An equity instrument is any contract that evidences a residual interest in the assets of the
Group and of the Company after deducting all of their liabilities. Equity instruments issued
by the Group and the Company are recognised at the proceeds received, net of direct issue
costs.
(ii) Financial Liabilities
Financial liabilities are classified as either financial liabilities at FVTPL or other financial
liabilities.
(iii) Financial Liabilities at Fair Value through Profit or Loss
Financial liabilities at fair value through profit or loss include financial liabilities held for
trading and financial liabilities designated upon initial recognition as at fair value through
profit or loss.
Financial liabilities held for trading include derivatives entered into by the Group and the
Company that do not meet the hedge accounting criteria. Derivative liabilities are initially
measured at fair value and subsequently stated at fair value with any resultant gains or losses
recognised in profit or loss. Net gains or losses on derivatives include exchange differences.
(iv) Other Financial Liabilities
Other financial liabilities are initially measured at fair value and subsequently measured at
amortised cost using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a financial
liability and of allocating interest expense over the relevant period. The effective interest rate
is the rate that exactly discounts estimated future cash payments through the expected life
of the financial liability, or (where appropriate) a shorter period, to the net carrying amount
on initial recognition.
(v) Derecognition of Financial Liabilities
The Group and the Company derecognise financial liabilities when, and only when, the
Groups and the Companys obligations are discharged, cancelled or they expire.
On derecognition of a financial liability, the difference between the carrying amount of the
financial liability extinguished or transferred to another party and the consideration paid,
including any non-cash assets transferred or liabilities assumed, is recognised in profit or
loss.

(c) Derivative Financial Instruments
The Group enters into derivative financial instruments such as foreign exchange forward contracts
to manage its exposure to foreign currency risk.
Derivatives are initially recognised at fair value at the date the derivative contract is entered into
and are subsequently remeasured to fair value at the end of each reporting period. The resulting
gain or loss is recognised in profit or loss unless the derivative is designated and effective as a
hedging instrument, in which event the timing of the recognition in profit or loss depends on the
nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset; a derivative with a negative
fair value is recognised as a financial liability. A derivative is presented as a non-current asset or a
non-current liability if the remaining maturity of the instrument is more than 12 months and it is not
expected to be realised or settled within 12 months. Other derivatives are presented as current
assets or current liabilities
3.18 Cash and Cash Equivalents
The Group and the Company adopt the indirect method in the preparation of the statements of cash
flows. Cash and cash equivalents are short-term, highly liquid investments with maturities of three
months or less from the date of acquisition and are readily convertible to cash with insignificant risk of
changes in value. In the statements of financial position, bank overdrafts are shown within borrowings in
current liabilities. Bank overdrafts do not form an integral part of the Groups and the Companys cash
management.
3.19 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the
Board of Directors, who is responsible for allocating resources and assessing performance of the
operating segments to make strategic decisions.
4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances. The Group
makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. To enhance the information content of the estimates, certain key variables
that are anticipated to have material impact to the Groups results and financial positions are tested for sensitivity
to changes in the underlying parameters. The estimates and assumptions that have a significant risk of causing
material adjustments to the carrying amounts of assets and liabilities within the next financial year are outlined
below:

4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)
(a) Impairment of Property, Plant and Equipment
The Group assesses impairment of property, plant and equipment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be recoverable, i.e. the carrying
amount of the asset is higher than the recoverable amount. Recoverable amount is measured at the higher
of the fair value less cost to sell for that asset and its value-in-use. The value-in-use is the net present value
of the projected future cash flows derived from the asset discounted at an appropriate discount rate.
Projected future cash flows used in impairment testing of property, plant and equipment are based on
Groups estimates calculated based on historical, sector and industry trends, general market and economic
conditions and other available information.
(b) Impairment Assessment of Investments in Subsidiaries
The Company assesses impairment of investments in subsidiaries whenever the events or changes in
circumstances indicate the carrying amounts of these investments may not be recovered, i.e. the carrying
amounts of these investments are more than the recoverable amounts. The assessments are subject to
changes such as market performance, economic and political situation of the country. Recoverable amount
is measured at the higher of the fair value less cost to sell for that asset and its value-in-use. The value-in-
use is the net present value of the projected future cash flow derived from that asset discounted at an
appropriate discount rate.
Significant judgement is required in the estimation of the present value of future cash flows generated
by these investments, which involve uncertainties and are significantly affected by assumptions used and
judgements made regarding estimates of future cash flows and discount rates.
(c) Recognition of Deferred Tax Asset
Deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available
against which the temporary differences can be utilised. This involves judgement regarding the future
financial performance of the Group and the Company in which the deferred tax asset has been recognised.
(d) Income Taxes
Significant judgement is required in determining the capital allowances, deductibility of certain expenses
and the chargeability of certain income during the estimation of the provision for income taxes. The Group
recognises liabilities for tax based on estimates of assessment of the tax liability due. When the final tax
outcome is different from the amount that were initially recorded, such differences will impact the income
tax and deferred tax provisions, where applicable, in the period in which such determination is made.
(e) Defined Benefit Plan
The present value of the pension obligations depends on a number of factors that are determined on an
actuarial basis using a number of assumptions. The assumptions used in determining the net cost/(income)
for pensions include the discount rate. Any changes in these assumptions will impact the carrying amount
of pension obligations.

4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)
(e) Defined Benefit Plan (continued)
The Group determines the appropriate discount rate at the end of each financial year. This is the interest
rate that should be used to determine the present value of estimated future cash outflows expected to
be required to settle the pension obligations. In determining the appropriate discount rate, the Group
considers the interest rates of high-quality corporate bonds that are denominated in the currency in which
the benefits will be paid and that have terms to maturity approximating the terms of the related pension
obligation.
Other key assumptions for pension obligations are based in part on current market conditions.
5 CAPITAL RISK MANAGEMENT AND FINANCIAL RISK
5.1 Capital Management
The primary objective of the Groups and of the Companys capital management is to ensure that a strong
credit rating and healthy capital ratios are maintained in order to support the business and maximise
shareholders value.
The Group and the Company define capital as the share capital and certain borrowings of the Group and
of the Company. The Group and the Company manage the capital structure and make adjustments to it,
in light of changes in economic condition. To maintain or adjust the capital structure, the Group and the
Company may adjust the dividend payment to shareholders, return capital to shareholders, issue new
shares or share buy-backs. The Groups and the Companys approach in managing capital are based on
defined guidelines that are approved by the Board of Directors.
There were no changes in the Groups and the Companys approach to capital management during the
financial year.
5.2 Financial Risk Management Objectives and Policies
The Groups financial risk management objectives and policies seek to ensure that adequate financial
resources are available for the development of the Groups businesses whilst managing its foreign
currency exchange risk, interest rate risk, credit risk, liquidity and cash flow risk. The Group operates within
clearly defined authority limits that have been approved by the Board of Directors. Further financial risk
management is carried out through risk reviews, internal control systems and insurance programmes.
Foreign currency exchange risk management
The Groups and the Companys exposure to foreign currency exchange risk is mainly as a result of foreign
currency transactions. Foreign exchange exposures originated from foreign currency receivables, payables
and cash flows generated from transactions denominated in foreign currencies.
The Group and the Company assess controls and monitor foreign exchange risk via regular review of
foreign exchange movements and foreign exchange exposure for foreign transactions. Where necessary,
foreign currency forward contracts are entered into to cover specific transactions to mitigate foreign
currency exchange risk.

5 CAPITAL RISK MANAGEMENT AND FINANCIAL RISK (CONTINUED)
5.2 Financial Risk Management Objectives and Policies (continued)
Foreign currency exchange risk management (continued)
The Groups exposure to foreign currencies is as follows:
US Singapore
Dollar Dollar Euro Others*
RM000 RM000 RM000 RM000
As at 31 December 2016
Group
Trade and other receivables 16,259 11 4,792 72

Cash and cash equivalents 802 0 0 0
Trade and other payables (4,992) (48) (266) (35)
Gross currency exposure 12,069 (37) 4,526 37

Less: Trade receivables hedged using
foreign exchange forward contracts (10,262) 0 0 0
Net currency exposure 1,807 (37) 4,526 37
As at 31 December 2016, the Company is not exposed to any foreign currency exchange risk.

Foreign currency exchange risk management (continued)
The Groups and the Companys exposure to foreign currencies are as follows:
US Singapore
Dollar Dollar Euro Others*
RM000 RM000 RM000 RM000
Group
Trade and other receivables 10,052 152 419 28

Cash and cash equivalents 3,599 0 0 0
Borrowings (8,660) 0 (352) 0
Trade and other payables (3,917) (39) (1,999) (248)
Gross currency exposure 1,074 113 (1,932) (220)

Less: Trade receivables hedged using
foreign exchange forward contracts (5,107) 0 0 0
Net currency exposure (4,033) 113 (1,932) (220)
Company
Borrowings (8,597) 0 0 0
Trade and other payables (65) 0 0 0
Net currency exposure (8,662) 0 0 0
* Other currencies comprise Swiss Franc, Australian Dollar and British Pound.
If functional currencies of the Group weakened/strengthened against the above currencies by 5% (2015:
5%), with all other variables held constant, the Groups profit for the financial year would increase/decrease
by RM0.3 million (2015: decrease/increase RM0.3 million).
In 2015, if functional currencies of the Company weakened/strengthened against the above currencies
by 5%, with all other variables held constant, the Companys loss for the financial year would increase/
decrease by RM0.4 million.

Interest rate risk management
The Groups and the Companys exposure to interest rates risk are through the impact of rate changes
on short-term and long-term borrowings. The Group and the Company do not make other placement in
interest bearing deposits, non-guaranteed, fluctuating commercial papers and the like.
The carrying amounts, the range of applicable interest rate during the financial year and the remaining
maturity of the Groups and of the Companys financial instruments that are exposed to the interest rate risk
are disclosed in the respective notes.
Interest rate sensitivity analysis
The sensitivity analysis has been determined based on the exposure to interest rates for financial liabilities
at the end of the reporting period. A 1% increase or decrease is used when reporting interest rate risk
internally to key management personnel and represents managements assessment of the reasonably
possible change in interest rates.
At the end of reporting period, if interests rates had been 1% higher/lower and all other variables were
held constant, the Groups and the Companys profit or loss for the year would increase or decrease/
increase by RM0.3 million (2015: RM0.8 million) and RMNil (2015: RM0.3 million) respectively. This is mainly
attributable to the Groups and the Companys exposure to interest rates on borrowings.
Credit risk management
Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty
default on its obligations. The Groups and the Companys exposure to credit risk arises primarily from cash
and cash equivalents and receivables. The Group and the Company seek to control credit risk by having
in place policies for credit control which cover, inter-alia, credit evaluation on all customer credit over a
certain amount, imposition of collateral or security and strict adherence to credit approval limits. Regular
reviews and monitoring of credit risk exposure and management of delinquent debtors form part of the
operational controls implemented by the Group and the Company to reduce such risk.
Apart from the concentration risk of the major customers as disclosed in Note 11, the Group and the
Company do not have significant credit risk exposure to any single counterparty or any group of
counterparties having similar characteristics. The Groups and the Companys historical experience in
collection of accounts receivable falls within the recorded allowances. Due to these factors, management
believes that no additional credit risk beyond amounts provided for collection losses is inherent in the
Groups and the Companys receivables.
At the end of the reporting period, the Groups and the Companys maximum exposure to credit risk is
the carrying amount of financial assets which are mainly trade and other receivables. The Groups and the
Companys credit risks on cash and bank balances are limited as the Group and the Company place their
funds with reputable financial institutions with high credit ratings.

Liquidity and cash flow risks managements
The Groups and the Companys policy on liquidity risk management is to maintain sufficient cash to meet
operational needs and the availability of funding through adequate amounts of committed credit facilities
and credit lines for working capital requirements. Daily monitoring of funds also minimises unexpected
shortfall in funds.
In managing the Groups liquidity risk, the Group has taken initiatives to manage its working capital by
improving selling prices of the Groups core products, improving production efficiency and carrying out
costs saving plans to further reduce expenses incurred.

The following are the maturity profile of the Groups and the Companys financial liabilities based on
contractual undiscounted cash flows:
Contractual/Forecasted cash flows

Carrying Within Between After
amount Total 1 year 1-5 years 5 years
RM000 RM000 RM000 RM000 RM000
Group
Trade and other payables 1 85,634 85,634 84,593 1,041 0

Amount due to former
immediate holding company 53,212 57,860 10,849 47,011 0
Borrowings 32,171 33,869 33,869 0 0
171,284 177,630 129,578 48,052 0
Company
Trade and other payables 1 1,186 1,186 1,186 0 0

Amount due to subsidiaries 3,426 3,426 3,426 0 0
57,824 62,472 15,461 47,011 0
Financial guarantee contracts (Note 32) 2 0 0 0 0 0

Liquidity and cash flow risks managements (continued)
Contractual/Forecasted cash flows

Carrying Within Between After
amount Total 1 year 1-5 years 5 years
RM000 RM000 RM000 RM000 RM000
Group

Borrowings 80,319 82,607 82,607 0 0
231,505 246,470 187,099 59,371 0
Company

Amount due to subsidiaries 3,426 3,426 3,426 0 0
Borrowings 28,133 29,088 29,088 0 0
87,039 100,671 41,300 59,371 0
Financial guarantee contracts (Note 32) 2 0 0 0 0 0
The maturity analysis applies to financial instruments only and therefore non-financial liabilities are not
1
included.
At the end of the reporting period, it was not probable that the counterparties to financial guarantee
2
commitments will claim under the contract. Consequently, the amount included is RMNil.

5.3 Fair value of financial instruments
The table below analyses financial instruments carried at fair value analysed by level within the fair value
hierarchy:
Level 1 Level 2 Level 3 Total

RM000 RM000 RM000 RM000
Group
Derivative financial liabilities 0 267 0 267
Derivative financial liabilities 0 79 0 79
The fair value of the Groups foreign exchange forward contracts at the end of the reporting period as
disclosed in Note 19 is determined by reference to the differences between the contract rates and quoted
forward exchange rates of contract with similar quantum and maturity profile at the end of the reporting
period.
The Groups and the Companys non-current receivables and other financial liabilities are measured using
expected future cash flows of forecasted payments discounted at current prevailing rates offered for similar
types of credit or lending arrangements. The estimated fair value for the non-current receivables and other
financial liabilities approximate their carrying value as at the reporting date.
Other than disclosed above, the carrying amounts of the financial assets and liabilities approximate their
fair values due to the relatively short term maturity of these financial instruments which mainly consists of
deposits, cash and bank balances, receivables, borrowings and payables.

6 PROPERTY, PLANT AND EQUIPMENT
Furniture,
fittings,
office
renovation Capital
Leasehold Plant and and Motor work-
land Buildings machinery equipment vehicles in-progress Total
RM000 RM000 RM000 RM000 RM000 RM000 RM000
Group
Net book value
At 1 January 2016 15,543 95,443 281,262 1,530 1,540 6,700 402,018

Additions 0 218 3,738 670 1,292 1,571 7,489
Disposals 0 0 (844) (280) (442) 0 (1,566)
Reclassification 0 8,029 21 187 0 (8,237) 0
Depreciation charge
for the financial
year (230) (1,258) (12,638) (733) (114) 0 (14,973)
Impairment loss 0 0 (7,809) 0 0 0 (7,809)
Write back of
impairment loss 0 6,627 21,507 0 0 0 28,134
At 31 December 2016 15,313 109,059 285,237 1,374 2,276 34 413,293
At 31 December 2016
Cost 19,212 131,664 580,802 14,102 9,141 34 754,955

Accumulated
depreciation (3,899) (18,439) (274,331) (12,728) (6,865) 0 (316,262)
Accumulated
impairment losses 0 (4,166) (21,234) 0 0 0 (25,400)
Net book value 15,313 109,059 285,237 1,374 2,276 34 413,293

6 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Furniture,
fittings,
office
renovation Capital
Leasehold Plant and and Motor work-
land Buildings machinery equipment vehicles in-progress Total
RM000 RM000 RM000 RM000 RM000 RM000 RM000
Group
Net book value
At 1 January 2015 15,773 95,362 285,832 1,717 2,184 0 400,868

Additions 0 667 6,983 524 150 8,881 17,205
Disposals 0 0 0 (5) 0 0 (5)
Write offs 0 0 (1,089) 0 0 0 (1,089)
Reclassification 0 553 1,628 0 0 (2,181) 0
Depreciation charge
for the financial year (230) (1,139) (12,092) (706) (794) 0 (14,961)
At 31 December 2015 15,543 95,443 281,262 1,530 1,540 6,700 402,018
At 31 December 2015
Cost 19,211 123,418 580,119 13,887 9,531 6,700 752,866

Accumulated
depreciation (3,668) (17,181) (263,085) (12,357) (7,991) 0 (304,282)
Accumulated
impairment losses 0 (10,794) (35,772) 0 0 0 (46,566)
Net book value 15,543 95,443 281,262 1,530 1,540 6,700 402,018

Furniture,
fittings, office
renovation and
equipment
RM000
Company
Net book value

At 1 January 2016 65
Depreciation charge for the financial year (56)
At 31 December 2016 9
At 31 December 2016
Cost 4,920
Accumulated depreciation (4,911)
Net book value 9
Net book value

At 1 January 2015 135
Depreciation charge for the financial year (70)
At 31 December 2015 65
At 31 December 2015
Cost 5,073
Accumulated depreciation (5,008)
Net book value 65
(a) Included in property, plant and equipment of the Group and the Company are asset held under hire-
purchase agreement with net book value as at reporting date amounting to RMNil (2015: RM30,680).
(b) The leasehold land in Gebeng and Kuala Lipis held by a subsidiary and all of its plant and machinery, both
present and future, affixed to or on the said lands are charged as security for the outstanding amount of
certain term loans of the Company and for certain bankers acceptances, revolving credit and bank overdraft
facilities as disclosed in Note 16.
(c) During the financial year, a subsidiary has ceased the paper lamination and downstream production lines
to streamline its business operations. As a result, the property, plant and equipment customised for the two
production lines have been fully impaired, resulting in the recognition of impairment loss of RM7.8 million
in the profit or loss.

(d) Impairment assessment for property, plant and equipment
In 2013, an impairment loss of RM45.8 million was recognised on the property, plant and equipment
of a plant of a subsidiary (Plant 3). During the financial year, Plant 3 had shown an indication that the
impairment loss may have decreased based on the operating results of the plant for the financial year ended
31 December 2016. Consequently, management performed an impairment assessment of Plant 3. Based
on managements assessment, the recoverable amount of Plant 3 as at 31 December 2016, based on value-
in-use (VIU) calculation is RM290.5 million, which is higher than its carrying value of RM262.4 million by
RM28.1 million. Accordingly, a write back of RM28.1 million was recognised in the profit or loss.
(a) Key assumptions used in the VIU calculation
The VIU calculation applied a discounted cash flow model using cash flow projections based on an
approved 5-year budget and projections covering the remaining useful life of Plant 3 of 18 years.
These projections reflect managements best estimate of the future results of Plant 3 based on past
experience and future outlook.
The key estimates used in the cash flow projections are the selling prices of the products, key
components of the raw material prices and the weighted average cost of capital specific to the Groups
industry. The key assumptions of the projections are as follows:
Selling prices are increased by 1.00% (2015: increased by 1.00%) year-on-year for the first 5 years
of projection and beyond the fifth year are extrapolated to the end of the useful life based on a
1.50% (2015: 1.25%) year-on-year increase.
Cost of major raw materials prices are increased by approximately 1.00% (2015: increased by
approximately 1.00%) year-on-year and beyond the fifth year are extrapolated to the end of the
useful life based on a 1.50% (2015: 1.50%) year-on-year increase.
Sales and production volumes are assumed to remain constant.
A pre-tax discount rate of 11.50% (2015: 10.61%) has been applied to the cash flow projections.
(b) Impact of possible change in key assumptions
The Groups impairment assessment includes an assessment of changes in key assumptions that would
impact the financial statements, as set out below:
If the discount rate increased by 1.00%, the recoverable amount would be lower by RM17.5 million,
the write back of impairment would be lower by RM17.5 million.
If the selling price decreased by 1.00%, the recoverable amount would be lower by RM13.8 million,
the write back of impairment would be lower by RM13.8 million.
If the prices of key components of raw materials increased by 5.00%, the recoverable amount
would be lower by RM29.8 million, the write back of impairment would be lower by RM28.1 million.
If the sales volume decreased by 1.00%, the recoverable amount would be lower by RM13.8
million, the write back of impairment would be lower by RM13.8 million.

7 INVESTMENT IN SUBSIDIARIES
Company
2016 2015
RM000 RM000
Unquoted shares, at cost 52,495 52,495

Less: Impairment loss (2,420) (47,429)
Unquoted shares, at carrying value 50,075 5,066
The shares in subsidiaries are held directly by the Company unless otherwise stated. Details of the subsidiaries
are as follows:
Proportion of
ownership interests
Name of company 2016 2015 Principal activities
% %
Mieco Manufacturing Sdn. Bhd. 100 100 Manufacturing and marketing of

chipboards and related products
Mieco Marketing Sdn. Bhd. 100 100 Dormant
Mieco Marketing (S) Pte. Ltd. 1
100 100 Dormant
Mieco Chemicals Sdn. Bhd. 100 100 Dormant
Mieco Wood Products Sdn. Bhd. 3 - 100 Dormant
Mieco Wood Resources Sdn. Bhd. 100 100 Dormant
Mieco International (HK) Limited 2 100 100 Dormant
Tudor Capital Sdn. Bhd. 100 100 Dormant
Aspire Benchmark Sdn. Bhd. 100 100 Dormant
Subsidiary of Mieco Wood

Resources Sdn. Bhd.
Mieco Reforestation Sdn. Bhd. 100 100 Dormant
All the subsidiaries are incorporated in Malaysia, except for Mieco Marketing (S) Pte. Ltd. and Mieco International
(HK) Limited, which are incorporated in Singapore and Hong Kong respectively.
1
The company is not audited by Deloitte PLT. As the company will apply for strike off before the forthcoming
Annual General Meeting of the company, no statutory audit is required.
2
The company is not audited by Deloitte PLT. As the company is dormant, no statutory audit is required under
Hong Kong Companies Ordinance.
3
The company has been disposed of during the financial year as disclosed in Note 33.

7 INVESTMENT IN SUBSIDIARIES (CONTINUED)
Impairment assessment for investment in a subsidiary
In 2013, an impairment loss of RM45.0 million was recognised on the investment in a subsidiary. During the
financial year, the subsidiary had shown an indication that the impairment loss may no longer exist based on the
operating results of the subsidiary for the financial year ended 31 December 2016. Consequently, management
performed an impairment assessment of the investment. Based on managements assessment, the recoverable
amount of the subsidiary as at 31 December 2016, based on value-in-use (VIU) calculation is RM455.1 million,
which is higher than its carrying value of RM382.1 million (inclusive of amount due from the subsidiary) by RM73.0
million. Accordingly, the impairment loss recognised of RM45.0 million has been written back in full.
(a) Key assumptions used in the VIU calculation
The VIU calculation applied a discounted cash flow model using cash flow projections based on an approved
5-year budget and projections to perpetuity. These projections reflect managements best estimate of the
future results of the subsidiary based on past experience and future outlook.
The key estimates used in the cash flow projections are as follows:
Selling prices are increased by 1.00% (2015: 1.00%) year-on-year for the first 5 years of projection.
Cost of major raw materials prices are increased by 1.00% (2015: 1.00%) year-on-year.
Sales and production volumes are assumed to remain constant.
A constant growth rate to perpetuity of 1.00% (2015: 3.00%) per annum.
A pre-tax discount rate of 11.50% (2015: 10.61%) has been applied to the cash flow projections.
(b) Impact of possible change in key assumptions
The Companys impairment assessment includes an assessment of changes in key assumptions that would
impact the financial statements, as set out below:
If the selling price decreased by 1%, the recoverable amount would be lower by RM30.0 million, the
write back of impairment would be lower by RM2.0 million.
If the prices of key components of raw materials increased by 5%, the recoverable amount would be
lower by RM55.3 million, the write back of impairment would be lower by RM27.3 million.
If the discount rate increased by 1%, the recoverable amount would be lower by RM38.7 million, the
write back of impairment would be lower by RM10.7 million.
If the projected growth rate to perpetuity decreased by 1%, the recoverable amount would be lower by
RM25.5 million, the write back of impairment would remain unchanged.

7 INVESTMENT IN SUBSIDIARIES (CONTINUED)
Impairment assessment for investment in a subsidiary (continued)
(b) Impact of possible change in key assumptions (continued)
The Companys impairment assessment includes an assessment of changes in key assumptions that would
impact the financial statements, as set out below (continued):
The change in the accumulated impairment loss in respect of interest in subsidiaries during the financial
year is as follows:
Company
2016 2015
RM000 RM000
At 1 January 47,429 47,429

Write back during the financial year (45,009) 0
At 31 December 2,420 47,429
8 AMOUNT DUE FROM/(TO) SUBSIDIARIES
Amount due to subsidiaries is unsecured, interest free and repayable on demand.
Amount due from subsidiaries is classified as follows:
Company
2016 2015
RM000 RM000
Current - unsecured
Interest bearing at effective interest rate of 5.35% (2015: 6.79%) 7,128 27,564
Interest free 10,407 7,703
17,535 35,267
Less: allowance for doubtful debts (2,112) (2,137)
15,423 33,130
Non-current - unsecured
367,244 343,976
382,667 377,106

8 AMOUNT DUE FROM/(TO) SUBSIDIARIES (CONTINUED)
The interest expense incurred by the Company on the external borrowings during the financial year amounting to
RM2.3 million (2015: RM4.5 million) is fully re-charged to a subsidiary.
As at 31 December 2016, amounts due from several subsidiaries amounting to RM2.11 million (2015: RM2.13
million) were impaired by the Company as the amounts were deemed to be irrecoverable as the entities remained
dormant as at the financial year end.
The change in the allowance for doubtful debts in respect of amounts due from subsidiaries during the financial
year is as follows:
Company
2016 2015
RM000 RM000
At beginning of financial year 2,137 2,137

Reversal during the financial year (25) 0
At end of financial year 2,112 2,137
9 DEFERRED TAXATION
Group Company
2016 2015 2016 2015
RM000 RM000 RM000 RM000
At beginning of financial year 0 0 0 0
(Charged)/Credited to profit or loss (Note 24):
- Property, plant and equipment (147) 0 11 0

- Provisions and employee defined benefit plan 381 0 (27) 0
- Inventories 1,640 0 0 0
- Receivables 92 0 (6) 0
- Others 8,223 0 22 0
10,189 0 0 0
At end of financial year 10,189 0 0 0

9 DEFERRED TAXATION (CONTINUED)
The movements in deferred tax assets and liabilities during the financial year (prior to offsetting of balances)
comprise the following:
Group Company
2016 2015 2016 2015
RM000 RM000 RM000 RM000
Deferred tax assets (before offsetting)

Provisions and employee defined benefit plan 3,528 3,147 131 158
Inventories 2,388 748 0 0
Receivables 616 524 507 513
Unused tax losses 3,805 3,910 1,142 1,162
Unused investment tax allowances 103,847 103,847 0 0
Unabsorbed capital allowances 61,452 67,143 0 0
Others 64 448 0 0
175,700 179,767 1,780 1,833

Deferred tax assets not recognised (89,687) (104,399) (1,775) (1,804)
86,013 75,368 5 29
Offsetting (75,824) (75,368) (5) (29)
Deferred tax assets (after offsetting) 10,189 0 0 0
Deferred tax liabilities (before offsetting)

Property, plant and equipment (75,500) (75,353) (3) (14)
Others (324) (15) (2) (15)
(75,824) (75,368) (5) (29)

Offsetting 75,824 75,368 5 29
Deferred tax liabilities (after offsetting) 0 0 0 0

9 DEFERRED TAXATION (CONTINUED)
As mentioned in Note 3, the tax effects of deductible temporary differences, unused tax losses and unused
tax credits which would give rise to net deferred tax assets are recognised to the extent that it is probable that
future taxable profits will be available against which the deductible temporary differences, unused tax losses
and unused tax credits can be utilised. At the end of the reporting period, the estimated amount of deductible
temporary differences, unused tax losses, unused investment tax allowances and unabsorbed capital allowances,
for which no deferred tax asset has been recognised in the financial statements due to uncertainty of realisation,
is as follows:
Group Company
2016 2015 2016 2015
RM000 RM000 RM000 RM000
Deductible temporary differences 2,634 2,672 2,634 2,672

Unused tax losses 5,049 5,488 4,760 4,842
Unused investment tax allowances 366,015 426,840 0 0
373,698 435,000 7,394 7,514
The Companys income tax rate is at 24% for the year of assessment 2016 (2015: 25%).
10 INVENTORIES
Group
2016 2015
RM000 RM000
At cost:
Raw materials 5,807 16,624
Work-in-progress 917 527
Finished goods 19,067 18,285
Spares and consumables 14,387 16,815
40,178 52,251

11 RECEIVABLES, DEPOSITS AND PREPAYMENTS
Group Company
2016 2015 2016 2015
RM000 RM000 RM000 RM000
Trade receivables 49,366 61,239 0 0

Less: allowance for doubtful debts (453) (49) 0 0
48,913 61,190 0 0
Other receivables 17,255 15,874 169 118

Less: allowance for doubtful debts (7,815) (7,815) (54) (54)
9,440 8,059 115 64

Deposits 148 269 7 7
Prepayments 419 199 15 7
10,007 8,527 137 8
Total 58,920 69,717 137 78
Trade receivables
The credit terms of the trade receivables ranging from 1 to 90 days (2015: 1 to 90 days).
The maximum exposure to credit risk for trade receivables as at the reporting date is the carrying amount of each
class of receivable mentioned above.
Of the total trade receivables balance of the Group at the end of the reporting period, 37% (2015: 58%) are due
from five (2015: seven) customers. There are no other customers which individually represents more than 5% of
the total trade receivable balance.
Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment record with
the Group.

11 RECEIVABLES, DEPOSITS AND PREPAYMENTS (CONTINUED)
The ageing analysis of the Groups trade receivables is as follows:

Allowance
Gross for doubtful Net of
amount debts allowances
RM000 RM000 RM000
Not past due 48,161 0 48,161

Past due 1 - 30 days 586 0 586
Past due 31 - 90 days 416 (406) 10
More than 90 days 203 (47) 156
49,366 (453) 48,913
Not past due 59,769 0 59,769

Past due 1 - 30 days 1,315 0 1,315
Past due 31 - 90 days 35 0 35
More than 90 days 120 (49) 71
61,239 (49) 61,190
As at 31 December 2016, the Groups trade receivables amounting to RM0.8 million (2015: RM1.4 million) were
past due but not impaired. The Group believes that, no additional impairment of trade receivables is necessary
as these trade receivables mainly arose from sales to customers that have good records of payment in the past.
The change in the allowance for doubtful debts in respect of trade receivables during the financial year is as
follows:
Group
2016 2015
RM000 RM000
At beginning of financial year 49 49

Provision during the year 431 0
Reversal during the year (27) 0
At end of financial year 453 49

11 RECEIVABLES, DEPOSITS AND PREPAYMENTS (CONTINUED)
Other receivables
The change in the allowance for doubtful debts in respect of other receivables during the financial year is as
follows:
Group Company
2016 2015 2016 2015
RM000 RM000 RM000 RM000
At beginning/At end of the financial year 7,815 7,815 54 54
12 CASH AND CASH EQUIVALENTS
Group Company
2016 2015 2016 2015
RM000 RM000 RM000 RM000

Less: Deposits with licensed financial institutions (953) (929) (184) (178)
35,483 10,682 9 38

Bank balances with licensed banks held on call are non-interest bearing. Deposits with licensed financial
institutions are bank deposit placements with tenure of 365 days (2015: 366 days). The deposits of the Group and
of the Company held with licensed financial institutions are restricted in usage and do not form part of cash and
cash equivalents.
The weighted average interest rates that were effective at the reporting date are as follows:
Group Company
2016 2015 2016 2015
% per % per % per % per
annum annum annum annum
Deposits with licensed financial institutions 3.74 3.59 3.35 3.35

13 SHARE CAPITAL
Group and Company

2016 2015
RM000 RM000
Authorised:
1,000,000,000 ordinary shares of RM1 each 1,000,000 1,000,000
Issued and fully paid:

210,000,000 ordinary shares of RM1 each 210,000 210,000
14 RESERVES
Group Company
2016 2015 2016 2015
RM000 RM000 RM000 RM000
Non-distributable:
Share premium 5,866 5,866 5,866 5,866
Foreign currency reserve (43) (44) 0 0
5,823 5,822 5,866 5,866

Distributable:
Retained earnings 159,943 76,387 159,137 79,483
165,766 82,209 165,003 85,349
On 27 February 2017, the Directors declared an interim single-tier dividend of 10 sen per share on 210,000,000
ordinary shares of RM1 each, amounting to RM21,000,000 in respect of the financial year ended 31 December
2016, paid on 24 March 2017 and this has not been included as a liability in the financial statements.
15 EMPLOYEE DEFINED BENEFIT PLAN
The Group and the Company operate an unfunded retirement benefit for those employees who are eligible under
the Group and the Company employment policy. The latest actuarial valuation of the plan was carried out on
13 February 2017.
The amount recognised in the Groups and the Companys statements of financial position are analysed as follows:
Group Company
2016 2015 2016 2015
RM000 RM000 RM000 RM000
Present value of defined benefit obligations 12,542 12,044 574 418

15 EMPLOYEE DEFINED BENEFIT PLAN (CONTINUED)
The movements during the financial year in the amounts recognised in the Groups and the Companys statements
of financial position are as follows:
Group Company
2016 2015 2016 2015
RM000 RM000 RM000 RM000
At beginning of financial year 12,044 10,956 418 389
Charged to profit or loss (Note 21) 1,513 1,450 81 78
Remeasurements (recognised in other

comprehensive income):
- Loss due to experience of the scheme 99 0 4 0
- (Gain)/loss due to change in actuarial assumptions (977) 0 79 0
Benefit paid (137) (362) (8) (49)
At end of financial year 12,542 12,044 574 418
The principal actuarial assumptions used in respect of the Groups and the Companys defined benefit plan are
as follows:
2016 2015
% %
Discount rate 5.40 5.50

Expected rate of salary increases 6.20 6.20
The expenses recognised in the profit or loss are analysed as follows:
Group Company
2016 2015 2016 2015
RM000 RM000 RM000 RM000
Current service cost 883 867 58 58

Interest cost 630 583 23 20
1,513 1,450 81 78

15 EMPLOYEE DEFINED BENEFIT PLAN (CONTINUED)
The sensitivity of the defined benefit plan as at 31 December 2016 to changes in the principal assumptions is as
follows:
Change in assumption Impact on defined benefit obligation
Group
Discount rate Increase by 1% Decrease by RM 1,034,445
Decrease by 1% Increase by RM 1,189,020
Expected rate of salary increases Increase by 1% Increase by RM 1,105,959

Decrease by 1% Decrease by RM 984,191
Company
Discount rate Increase by 1% Decrease by RM 45,089
Decrease by 1% Increase by RM 52,852
Expected rate of salary increases Increase by 1% Increase by RM 49,510

Decrease by 1% Decrease by RM 43,213
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions
constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When
calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method
(present value of the defined benefit obligation calculated with the projected unit credit method at the end of
the reporting period) has been applied as when calculating the pension liability recognised in the statement of
financial position.
As at 31 December 2016, the Groups and the Companys weighted average duration of the defined benefit
obligation are 9 years (2015: 10 years) and 10 years (2015: 8 years) respectively.
Expected maturity analysis of undiscounted pension obligation as at the reporting dates:
Less than Between Between Over

a year 1 - 2 years 2 - 5 years 5 years Total
RM000 RM000 RM000 RM000 RM000
Group
At 31 December 2016 932 1,423 3,414 43,146 48,915

At 31 December 2015 453 1,387 3,022 39,461 44,323
Company
At 31 December 2016 122 23 246 2,859 3,250

At 31 December 2015 12 145 267 1,545 1,969

16 BORROWINGS
Group Company
2016 2015 2016 2015
RM000 RM000 RM000 RM000
Current
Secured:
Term loan 0 28,103 0 28,103
Bankers acceptances 25,889 8,998 0 0
Revolving credit 4,000 5,000 0 0
Bank overdraft 2,282 0 0 0
Unsecured:
Term loan 0 350 0 0
Bankers acceptances 0 33,734 0 0
Foreign currency trade financing 0 415 0 0
Revolving credit 0 0 0 0
Hire-purchase obligations 0 30 0 30
Bank overdraft 0 3,689 0 0
32,171 80,319 0 28,133
The weighted average interest rates that were effective as at the end of the reporting period are as follows:
Group Company
2016 2015 2016 2015
% per annum % per annum % per annum % per annum
Term loan 0 4.30-7.91 0 4.30-7.91

Bankers acceptances 4.80-5.40 4.44-5.25 0 0
Foreign currency trade financing 0 1.55-2.10 0 0
Revolving credit 5.65 5.85 0 0
Hire-purchase obligations 0 5.06 0 5.06
Bank overdraft 6.65 7.60 0 0
The carrying amounts of the borrowings approximate their fair value at 31 December 2016.
Bank overdraft, bankers acceptances, revolving credit and bank overdraft facilities are utilised to finance the
purchase of raw materials and working capital.
As at the reporting date, the Groups and the Companys bankers acceptances, revolving credit and bank overdraft
facilities amounting to RM32.1 million (2015: RM42.1 million) and RMNil (2015: RM28.1 million) respectively are
secured against the property, plant and equipment of the Group and the Company as disclosed in Note 6.
As at 31 December 2016, the Company has complied with all the financial covenants for the borrowings and did
not default in any repayment of principals and interests in respect of this term loans as at the reporting date.

17 AMOUNT DUE TO FORMER IMMEDIATE HOLDING COMPANY
In 2015, the former immediate holding company was BRDB Developments Sdn. Bhd. (BRDB) and the ultimate
holding company was Ambang Sehati Sdn. Bhd. (ASSB), both of which are incorporated in Malaysia. During the
financial year, BRDB disposed of its entire shareholdings in the Company to Dato Sri Ng Ah Chai as disclosed in
Note 33. Upon the completion of the disposal, BRDB and ASSB ceased to be the immediate and ultimate holding
companies of the Company.
Amount due to former immediate holding company is as follows:
Group and Company

2016 2015
RM000 RM000
Current - unsecured
Interest bearing at effective interest rate of 5.35% (2015: 5.35%) 5,456 0
9,177 4,311
Non-current - unsecured
44,035 46,694
53,212 51,005
18 TRADE AND OTHER PAYABLES
Group Company
2016 2015 2016 2015
RM000 RM000 RM000 RM000
Current
Trade payables 68,704 60,273 0 0
Accrued expenses 4,388 3,141 984 169
Other payables 11,261 26,406 202 4,348
Amount due to a former related company (Note 29) 240 1,281 0 0
Amount due to a former related party (Note 29) 0 9,663 0 0
84,593 100,764 1,186 4,517
Non-current
Amount due to a former related company (Note 29) 1,041 0 0 0
85,634 100,764 1,186 4,517

18 TRADE AND OTHER PAYABLES (CONTINUED)
The credit terms of trade and other payables ranging from 1 to 90 days (2015: 1 to 90 days).
Amount due to a former related company, a subsidiary of the former immediate holding company, is unsecured,
interest free and repayable on demand.
Amount due to a related party, a company in which a Director of subsidiaries has financial interest, is unsecured,
interest free and repayable on demand.
Included in trade payables is an amount due to a related party, Seng Yip Furniture Sdn. Bhd., as disclosed in Note
29.
Included in other payables is an amount due to a related party, Tomisho Sdn. Bhd., as disclosed in Note 29.
19 DERIVATIVE FINANCIAL INSTRUMENTS
The Groups derivatives comprise solely foreign exchange forward contracts incepted to hedge its currency
exposures arising from future sales of goods and trade receivables after netting of the purchases of raw materials
in United States Dollar (USD). The foreign exchange forward contracts generally have a maturity period between
1 to 6 months.
Details of the Groups derivative financial instruments are outlined below:
Group
2016 2015
RM000 RM000
Fair value of remeasured foreign forward exchange contracts 267 79
At 31 December 2016, the Groups foreign exchange forward contracts entered into are as follows:
2016
Currency to be RM000 Average
Hedged items received equivalent contractual rate
US Dollar
Trade receivables 2.338 million 10,262 4.3896
2015
Currency to be RM000 Average
Hedged items received equivalent contractual rate
US Dollar
Trade receivables 1.196 million 5,107 4.2714

19 DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
Foreign exchange forward contracts are entered into with licensed banks to hedge the Groups exposure to
foreign exchange risk in respect of its export sales by establishing the rate at which foreign currency assets or
liabilities will be settled.

These contracts are executed with credit worthy/reputable financial institutions in Malaysia. As such, credit risk
and liquidity risk in respect of non-performance by counterparties to these contracts are minimal.
20 REVENUE
Group Company
2016 2015 2016 2015
RM000 RM000 RM000 RM000
Sale of goods 324,096 354,988 0 0

Management fee receivable from subsidiaries 0 0 3,494 2,955
324,096 354,988 3,494 2,955
21 STAFF COSTS
Group Company
2016 2015 2016 2015
RM000 RM000 RM000 RM000
Wages, salaries and bonuses 19,626 20,187 1,738 1,555

Defined contribution plan 2,672 2,742 226 206
Employee defined benefit plan (Note 15) 1,513 1,450 81 78
Other employee benefits 9,788 9,427 402 186
33,599 33,806 2,447 2,025
Details of the defined benefit plan for the Group and the Company are set out in Note 15.
In 2016, included in the staff costs of the Group and the Company are Executive Directors remuneration, excluding
estimated monetary value of benefits-in-kind, as disclosed in Note 26.

22 PROFIT/(LOSS) FROM OPERATIONS
The following items have been charged/ (credited) in arriving at profit/(loss) from operations:
Group Company
2016 2015 2016 2015
RM000 RM000 RM000 RM000
Write off of inventories 135 87 0 0

Fair value loss/(gain) on derivative financial instruments 188 (1,249) 0 0
Auditors remuneration:
- current financial year 192 246 60 60
- overprovision in prior financial year (1) (88) 0 (1)
Management fees 365 400 365 400
Allowance for/(Reversal of allowance for)
doubtful debts - net:
- subsidiary 0 0 (25) 0
- trade receivables 404 0 0 0
Rental of building 447 995 0 0
Unrealised (gain)/loss on foreign exchange
- borrowings (948) 2,303 0 0
- amount due from a subsidiary 0 0 (11) (63)
- others (2) 40 0 0
Loss on disposal of property, plant and equipment 1,517 3 0 0
General insurance 3,540 2,748 42 42
Allowance for/(Write back of allowance for)
inventories obsolescence 6,833 (633) 0 0
Rental income (60) (60) 0 0
Write off of property, plant and equipment 0 1,089 0 0

23 FINANCE COSTS AND FINANCE INCOME
Group Company
2016 2015 2016 2015
RM000 RM000 RM000 RM000
Finance costs
Interest expense on:

- Bank overdraft 333 85 0 0
- Bankers acceptances 1,785 2,156 0 0
- Hire purchase liabilities 3 4 3 4
- Term loans 535 2,712 530 2,675
- Amount due to former immediate holding company 1,820 1,820 1,820 1,820
- Revolving credit 223 292 0 0
- Foreign currency trade financing 1 5 0 0
Loan facility fees 200 30 30 30
4,900 7,104 2,383 4,529

Less: offsetting 0 0 (2,350) (4,495)
4,900 7,104 33 34
Finance income
Recovery of interest from a subsidiary

in respect of term loan 0 0 (530) (2,675)
Recovery of interest from a subsidiary
in respect of borrowings from former
immediate holding company 0 0 (1,820) (1,820)
Interest income (52) (6) (44) (4)
(52) (6) (2,394) (4,499)

Less: offsetting 0 0 2,350 4,495
(52) (6) (44) (4)

24 TAX CREDIT

Group Company
2016 2015 2016 2015
RM000 RM000 RM000 RM000
Tax expense for the financial year:
In respect of the current year:

- Malaysian income tax 0 0 0 0
- Deferred tax (Note 9) (10,189) 0 0 0
(10,189) 0 0 0
Under provision prior year
- Malaysian income tax 30 0 0 0
(10,159) 0 0 0

The effective tax rates of the Groups and the Companys profit/(loss) before taxation differ from the statutory
income tax rate of 24% (2015: 25%) and is reconciled as below:
Group Company
2016 2015 2016 2015
% % % %
Statutory income tax rate of Malaysia 24 25 24 (25)

Tax effects of:
- Income not subjected to tax (21) 0 (24) 0
- Expenses not deductible 3 4 0 131
- Utilisation of deferred tax assets previously not
recognised (6) (28) 0 (105)
- Recognition of deferred tax assets previously not
recognised (14) 0 0 0
- Underprovision in prior year 0 0 0 0
- Change in tax rate 0 (1) 0 (1)
Effective tax rate (14) 0 0 0

25 EARNINGS PER SHARE
The earnings per share of the Group is calculated based on the profit attributable to owners of the Company of
RM82.7 million (2015: RM18.6 million) divided by the weighted average number of 210.0 million (2015: 210.0
million) ordinary shares in issue during the financial year.
The weighted average number of ordinary shares in issue has not been adjusted to assume dilution as the
Group does not issue any financial instruments or other contract that may entitle its holders to ordinary shares.
Accordingly, the diluted earnings per share is the same as the basic earnings per share.
26 DIRECTORS REMUNERATION
Group Company
2016 2015 2016 2015
RM000 RM000 RM000 RM000
Directors of the Company

Non-executive Directors:
- fees - overprovision of prior years fees (72) 0 (72) 0
- fees 158 180 158 180
- allowances and other emoluments 47 55 47 55
133 235 133 235
Executive Director:
- salaries and bonus 668 0 668 0
- allowances and other emoluments 200 0 200 0
- defined contribution plan 80 0 80 0
- other employee benefits 4 0 4 0
- estimated monetary value of benefits-in-kind 6 0 6 0
958 0 958 0
Sub-total 1,091 235 1,091 235
Directors of subsidiaries
Non-executive Directors:
- fees 8 8 0 0
Sub-total 8 8 0 0
Total 1,099 243 0 235
Total (excluding estimated monetary 1,093 243 1,085 235

value of benefits-in-kind)

27 CAPITAL COMMITMENTS
Group
2016 2015
RM000 RM000
Capital expenditure:
- approved and contracted for 0 1,865
- approved but not contracted for 0 11,184
0 13,049
Analysed as follows:
- property, plant and equipment 0 13,049
28 NON-CANCELLABLE OPERATING LEASE COMMITMENTS
The Group leases an office space under a non-cancellable operating lease agreement and the lease agreement is
renewable at the end of the lease period at market rate.
The future aggregate minimum lease payments under non-cancellable operating lease are as follows:
Group
2016 2015
RM000 RM000
No later than 1 year 0 211
29 SIGNIFICANT RELATED PARTY TRANSACTIONS AND BALANCES
In addition to related party disclosures disclosed elsewhere in the financial statements, set out below are other
significant related party transactions and balances. The related party transactions described below were carried
out on terms and conditions negotiated between the Group and the related parties.
(a) Relationship with related parties
Related parties Relationship
Ambang Sehati Sdn. Bhd. Former ultimate holding company

BRDB Developments Sdn. Bhd. Former immediate holding company
BR Property Holdings Sdn. Bhd. Subsidiary of the former immediate holding company
Sierra Gardens Sdn. Bhd. A company in which a former Director of subsidiaries has financial interest
Mieco Manufacturing Sdn. Bhd. Wholly-owned subsidiary
Mieco Marketing Sdn. Bhd. Wholly-owned subsidiary
Seng Yip Furniture Sdn. Bhd. Common Director and major shareholder
Tomisho Sdn. Bhd. Common Director and major shareholder

29 SIGNIFICANT RELATED PARTY TRANSACTIONS AND BALANCES (CONTINUED)
(b) Significant transactions with related parties
Group Company
2016 2015 2016 2015
RM000 RM000 RM000 RM000
BRDB Developments Sdn. Bhd.

- Management fee payable 365 400 365 400
- Interest expense 1,820 1,820 1,820 1,820
BR Property Holdings Sdn. Bhd.

- Rental of office building 235 275 0 0
Mieco Manufacturing Sdn. Bhd.

- Interest income 0 0 (2,350) (4,495)
- Management fee receivable 0 0 (3,494) (2,955)
Seng Yip Furniture Sdn. Bhd.

- Purchase of logs, slabs and sawdust 2,895 0 0 0
- Sales of chipboards (1,402) 0 0 0
- Rental income (15) 0 0 0
Tomisho Sdn. Bhd.

- Purchase of furniture and office equipment 42 0 0 0
(c) Significant balances with related parties
Group Company
2016 2015 2016 2015
RM000 RM000 RM000 RM000
Amount due to former immediate holding company

BRDB Developments Sdn. Bhd. 53,212 51,005 53,212 51,005
Amount due to a former related company

BR Property Holdings Sdn. Bhd. 1,281 1,281 0 0
Amount due from/(to) subsidiaries

Mieco Manufacturing Sdn. Bhd. 0 0 377,090 371,540
Mieco Marketing Sdn. Bhd. 0 0 5,494 5,494
Tudor Capital Sdn. Bhd. 0 0 (3,411) (3,411)
Amount due to related parties

Sierra Gardens Sdn. Bhd. 0 9,663 1 0 0
Seng Yip Furniture Sdn. Bhd. 715 0 0 0
Tomisho Sdn. Bhd. 44 0 0 0
Amount due to Sierra Gardens Sdn. Bhd. arose from a transaction prior to the entity becoming a related
1
party of the Group.

29 SIGNIFICANT RELATED PARTY TRANSACTIONS AND BALANCES (CONTINUED)
(d) Compensation of key management personnel
Key management personnel are those persons having authority and responsibility for planning, directing
and controlling the activities of the entity, directly or indirectly, including Directors of the Company.
The remuneration of key management personnel during the financial year are as follows:
Group Company
2016 2015 2016 2015
RM000 RM000 RM000 RM000
Remuneration and benefits 1,280 1,258 1,183 875

Post-employment benefits 128 149 117 107
1,408 1,407 1,300 982
30 OPERATING SEGMENT
The Group operates principally within one segment, that is, manufacturing and sales of wood based products.
Other operation of the Group comprises investment holding which is not of sufficient size to be reported separately.
This is consistent with the internally generated reports reviewed by Board of Directors to make strategic decisions.
The products of the Group were sold to the following geographical areas.
Revenue
2016 2015
RM000 RM000
Malaysia 240,083 283,270

Hong Kong and China 13,696 12,307
Others 70,317 59,411
324,096 354,988
Total assets Capital expenditure

2016 2015 2016 2015
RM000 RM000 RM000 RM000
Malaysia 559,592 536,419 7,489 17,205

Others 0 1 0 0
559,592 536,420 7,489 17,205
The carrying value of non-current assets located in foreign countries is not material as at the reporting date.

31 FINANCIAL INSTRUMENTS BY CATEGORY
The table below provides an analysis of the financial instruments by category.
Group Company
2016 2015 2016 2015
RM000 RM000 RM000 RM000
Loan and receivables
Non-current
Amount due from subsidiaries 0 0 367,244 343,976
Current
Receivables and deposits 58,501 69,518 122 71
Amount due from subsidiaries 0 0 15,423 33,130
94,937 81,129 15,738 33,417
Other financial liabilities at amortised cost
Non-current
Amount due to former immediate holding company 44,035 46,694 44,035 46,694
Trade and other payables 1,041 0 0 0
45,076 46,694 44,035 46,694
Current
Trade and other payables 84,593 100,102 1,186 4,475
Amount due to subsidiaries 0 0 3,426 3,426
Amount due to former immediate holding company 9,177 4,311 9,177 4,311
Borrowings 32,171 80,319 0 28,133
125,941 184,732 13,789 40,345
Financial liabilities at fair value through profit or loss
Derivative financial instruments 267 79 0 0

32 FINANCIAL GUARANTEE CONTRACTS
Company
2016 2015
RM000 RM000
Financial guarantees (unsecured) issued by the Company to licensed

financial institutions for banking facilities granted to a subsidiary 49,069 66,431
33 SIGNIFICANT EVENTS
(a) Sale of the entire issued and paid-up share capital of Mieco Wood Products Sdn Bhd (MWP)
On 25 September 2015, the Company entered into a conditional Sale and Purchase Agreement with
Anjakan Kekal Sdn. Bhd. (AKSB) for the sale by the Company of 500,000 ordinary shares of RM1 each in
MWP, representing the entire issued and paid-up share capital of MWP to AKSB, for a cash consideration of
RM35 million.
The sale of MWP completed on 15 March 2016. Consequently, MWP ceased to be a subsidiary of the
Company. A gain on disposal of RM35 million was recognised in the Groups and Companys profit or loss.
(b) Disposal of shares in the Company by BRDB Developments Sdn. Bhd. (BRDB)
On 30 June 2016, BRDB, the then immediate holding company, entered into a conditional share sale
agreement with Dato Sri Ng Ah Chai to dispose 119,193,971 ordinary shares of RM1.00 each, representing
approximately 56.76% of the issued and paid-up share capital of the Company, for a cash consideration of
RM107,274,574. The disposal became unconditional on 4 October 2016. Consequently, BRDB ceased to be
the immediate holding company of the Company.

SUPPLEMENTARY INFORMATION
BREAKDOWN OF RETAINED EARNINGS INTO REALISED AND
UNREALISED
The breakdown of the retained earnings of the Group and of the Company as at 31 December 2016 into realised
and unrealised profits is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated
25 March 2010 and prepared in accordance with the Guidance on Special Matter No. 1, Determination of Realised
and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing
Requirements, as issued by the Malaysian Institute of Accountants.
Group Company
2016 2015 2016 2015
RM000 RM000 RM000 RM000
Total retained earnings of the Company and its subsidiaries
- Realised 145,573 72,446 158,168 77,012

- Unrealised 15,480 5,136 969 2,471
161,053 77,582 159,137 79,483

Add: Consolidation adjustments (1,110) (1,195) 0 0
Retained earnings as per financial statements 159,943 76,387 159,137 79,483
The disclosure of realised and unrealised profits above is solely for compliance with the directive issued by Bursa
Malaysia Securities Berhad and should not be used for any other purpose.

STATEMENT BY DIRECTORS
PURSUANT TO SECTION 251(2) OF THE COMPANIES ACT, 2016
The Directors of Mieco Chipboard Berhad state that, in their opinion, the accompanying financial statements are drawn
up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the
requirements of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the
Group and of the Company as of 31 December 2016 and of the financial performance and the cash flows of the Group
and of the Company for the year ended on that date.
The supplementary information set out on page 105, which is not part of the financial statements, is prepared in all
material aspects, in accordance with Guidance on Special Matter No. 1 Determination of Realised and Unrealised
Profits and Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements as
issued by the Malaysian Institute of Accountants and the directive of Bursa Malaysia Securities Berhad.
Signed on behalf of the Board of Directors in accordance with their resolution dated 30 March 2017.
DATO SRI NG AH CHAI Kajendra A/L Pathmanathan

DIRECTOR DIRECTOR

STATUTORY DECLARATION
PURSUANT TO SECTION 251(1) OF THE COMPANIES ACT, 2016
I, Dato Sri Ng Ah Chai, the Director primarily responsible for the financial management of Mieco Chipboard Berhad,
do solemnly and sincerely declare that the accompanying financial statements are, in my opinion, correct and I make
this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory
Declarations Act, 1960.
DATO SRI NG AH CHAI
Subscribed and solemnly declared by the abovenamed Dato Sri Ng Ah Chai at Kuala Lumpur in Federal Territory, this
30th day of March 2017.
Before me,
COMMISSIONER FOR OATHS

INDEPENDENT AUDITORS REPORT
TO THE MEMBERS OF MIECO CHIPBOARD BERHAD
(Incorporated in Malaysia)
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of MIECO CHIPBOARD BERHAD, which comprise the statements of financial
position of the Group and of the Company as of 31 December 2016 and the statements of profit or loss and other
comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company
for the year then ended, and notes to the financial statements, including a summary of significant accounting policies
and other explanatory information, as set out on pages 41 to 104.
In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group
and of the Company as at 31 December 2016, and of their financial performance and their cash flows for the year then
ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and
the requirements of the Companies Act, 1965 in Malaysia.
Basis of Opinion
We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on
Auditing. Our responsibilities under those standards are further described in the Auditors Responsibilities for the Audit
of the Financial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence and Other Ethical Responsibilities
We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct
and Practice) of the Malaysian Institute of Accountants (By-Laws) and the International Ethics Standards Board for
Accountants Code of Ethics for Professional Accountants (IESBA Code), and we have fulfilled our other ethical
responsibilities in accordance with the By-Laws and the IESBA Code.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the Group and of the Company for the current year. These matters were addressed in the context
of our audit of the financial statements of the Group and of the Company as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.

TO THE MEMBERS OF MIECO CHIPBOARD BERHAD (Contd)
Key audit matters Our audit performed and responses thereon
Impairment of property, plant and equipment
In 2013, an impairment loss of RM45.8 million was recognised Our audit procedures, among others, included:
on the property, plant and equipment of a plant of the major
subsidiary, Mieco Manufacturing Sdn Bhd (Mieco Manufacturing) Involvement of our own valuation specialist
(Plant 3). During the financial year, Plant 3 had shown an to review the appropriateness of the
indication that the impairment loss may have decreased based impairment model;
on the operating results of the plant for the financial year ended We performed retrospective review of the
31 December 2016. Consequently, management performed an cash flow projection used in the model
impairment assessment of Plant 3. to assess the reliability of managements
estimates;
The Group assessed impairment of property, plant and equipment
We challenged the reasonableness of the
by calculating its value-in-use (VIU) using a discounted cash flow
key bases and assumptions underpinning
model. Based on the assessment, the VIU calculated is RM290.5
the model, including sale and production
million, which is higher than its carrying value of RM262.4 million.
volume growth, cost of raw materials, selling
Accordingly, a write back of RM28.1 million was recognised in the
price growth and discount rate used; and
profit or loss.
We performed sensitivity analysis on
Projected future cash flows used in the impairment testing managements assumptions to reflect
involve significant degree of management estimates on the key reasonably possible future alternative
assumptions such as sale and production volume growth, cost of scenarios.
raw materials, selling price growth and discount rate used.
Refer to key estimates and assumptions disclosed in Note 6.
Impairment of investment in subsidiary
In 2013, an impairment loss of RM45.0 million was recognised Our audit procedures, among others, included:
on the investment in Mieco Manufacturing. During the financial
year, Mieco Manufacturing had shown an indication that the Involvement of our own valuation specialist
impairment loss may no longer exist based on the operating to review the appropriateness of the
results of Mieco Manufacturing for the financial year ended 31 impairment model;
December 2016. Consequently, management performed an
We performed retrospective review of the
impairment assessment of the investment by calculating its value-
cash flow projection used in the model
in-use (VIU) using a discounted cash flow model.
to assess the reliability of managements
estimates;
Based on the assessment, the VIU calculated is RM455.1 million,
which is higher than its carrying value of RM382.1 million (inclusive We challenged the reasonableness of the
of amount due from Mieco Manufacturing. Accordingly, a full key bases and assumptions underpinning
write back of RM45.0 million was recognised in the profit or loss. the model, including sale and production
volume growth, cost of raw materials, selling
Significant judgement is required in the estimation of the present price growth, projected growth to perpetuity
value of future cash flows generated by the investment, which and discount rate used; and
involve uncertainties and are significantly affected by assumptions We performed sensitivity analysis on
used and judgements made regarding estimates of future cash managements assumptions to reflect
flows and discount rates. reasonably possible future alternative
scenarios.
Refer to key estimates and assumptions disclosed in Note 7.

Information Other than the Financial Statements and Auditors Report Thereon
The directors of the Company are responsible for the other information. The other information comprises the directors
report, which we obtained prior to the date of this auditors report, and the remaining other information included in the
annual report (but does not include the financial statements of the Group and of the Company and our auditors report
thereon), which is expected to be made available to us after that date.
Our opinion on the financial statements of the Group and of the Company does not cover the other information and we
do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to
read the other information identified above and, in doing so, consider whether the other information is materially
inconsistent with the financial statements of the Group and of the Company or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of this auditors
report, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
When we read the remaining other information included in the annual report, if we conclude that there is a material
misstatement therein, we are required to communicate the matter to those charged with governance.
Responsibilities of the Directors for the Financial Statements
The directors of the Company are responsible for the preparation of financial statements of the Group and of the
Company that give a true and fair view in accordance with Malaysian Financial Reporting Standards, International
Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The directors are also
responsible for such internal control as the Directors determine is necessary to enable the preparation of financial
statements of the Group and of the Company that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements of the Group and of the Company, the Directors are responsible for assessing the
Groups and the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or
the Company or to cease operations, or have no realistic alternative but to do so.
Auditors Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the
Company as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of these financial statements.

As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on
Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
(a) Identify and assess the risks of material misstatement of the financial statements of the Group and of the Company,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
(b) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Groups and the Companys internal control.
(c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the Directors.
(d) Conclude on the appropriateness of the Directors use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Groups or the Companys ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures
in the financial statements of the Group and of the Company or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report.
However, future events or conditions may cause the Group or the Company to cease to continue as a going
concern.
(e) Evaluate the overall presentation, structure and content of the financial statements of the Group and of the
Company, including the disclosures, and whether the financial statements of the Group and of the Company
represent the underlying transactions and events in a manner that achieves fair presentation.
(f) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial statements of the Group. We are responsible
for the direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most significance in the
audit of the financial statements of the Group and of the Company for the current year and are therefore the key audit
matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.

Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act, 2016, we also report that in the case of consolidated
financial statements, the names of the subsidiaries, of which we have not acted as auditors, are indicated in Note 7 to
the Financial Statements.
Other Reporting Responsibilities
The supplementary information set out on page 105 is disclosed to meet the requirement of Bursa Malaysia Securities
Berhad and is not part of the financial statements. The Directors are responsible for the preparation of the supplementary
information in accordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits
or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by
the Malaysian Institute of Accountants (MIA Guidance) and the directive of Bursa Malaysia Securities Berhad. In our
opinion, the supplementary information is prepared in all material respects, in accordance with the MIA Guidance and
the directive of Bursa Malaysia Securities Berhad.
Other Matter
This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies
Act, 2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the contents
of this report.
DELOITTE PLT (LLP0010145-LCA)

Chartered Accountants (AF 0080)
TEO SWEE CHUA

Partner - 2846/01/18 (J)
Chartered Accountant
30 March 2017

ANALYSIS OF SHAREHOLDINGS
AS AT 4 APRIL 2017
Authorised Capital : RM1,000,000,000

Issued and Fully Paid-Up Capital : RM210,000,000
Class of Shares : Ordinary Shares
Voting Rights : 1 vote per ordinary share
DISTRIBUTION OF SHAREHOLDINGS
No. of Holders % of Holders No. of Shares % of Shares
Size of Holdings
Less than 100 928 21.02 29,354 0.01

100 1,000 1,153 26.12 1,072,330 0.51
1,001 10,000 1,753 39.72 7,663,563 3.65
10,001 100,000 475 10.76 15,053,155 7.17
100,001 less than 5% of issued shares 104 2.36 75,447,627 35.93
5% and above of issued shares 1 0.02 110,733,971 52.73
Total 4,414 100.00

210,000,000 100.00
DIRECTORS INTEREST IN SHARES BASED ON THE REGISTER OF DIRECTORS SHAREHOLDINGS
Direct Interest Indirect Interest

No. of Shares % No. of Shares %
In the Company
Dato Sri Ng Ah Chai 119,218,055 56.77 - -

Cheam Tow Yong 300,000 0.14 - -
THIRTY (30) LARGEST SHAREHOLDERS BASED ON THE RECORD OF DEPOSITORS
Name
Shareholding %
1) RHB Nominees (Tempatan) Sdn Bhd 110,733,971 52.73

OSK Capital Sdn Bhd for Ng Ah Chai
2) Maybank Securities Nominees (Tempatan) Sdn Bhd 7,163,700 3.41

Pledged Securities Account for Chee Hong Leong
3) HSBC Nominees (Asing) Sdn Bhd 6,442,900 3.07

Exempt AN for Credit Suisse (SG BR-TST-Asing)
4) Alliancegroup Nominees (Tempatan) Sdn Bhd 6,000,000 2.86

Pledged Securities Account for Ng Ah Chai (8103749)
5) Maybank Nominees (Tempatan) Sdn Bhd 3,217,600 1.53

Pledged Securities Account for Chee Hong Leong
6) RHB Capital Nominees (Tempatan) Sdn Bhd 2,500,000 1.19

Pledged Securities Account for Chee Chik Eng

AS AT 4 APRIL 2017 (Contd)
THIRTY (30) LARGEST SHAREHOLDERS BASED ON THE RECORD OF DEPOSITORS (Contd)
Name
Shareholding %
7) Alliancegroup Nominees (Tempatan) Sdn Bhd 2,460,000 1.17

Pledged Securities Account for Ng Ah Chai (100426)
8) Citigroup Nominees (Asing) Sdn Bhd 2,449,800 1.17

Exempt AN for OCBC Securities Private Limited (Client A/C-NR)

Pledged Securities Account for Tee Tiam Hock
10) Citigroup Nominees (Asing) Sdn Bhd 1,700,000 0.81

Exempt AN for Citibank New York (Norges Bank 14)
11) Tan Ah Loy @ Tan May Ling 1,700,000 0.81
12) JF Apex Nominees (Tempatan) Sdn Bhd 1,450,000 0.69

Pledged Securities Account for Lee Kim Song (Margin)

Pledged Securities Account for Chee Kok Chan

Maybank Trustees Berhad for Apex Dana AL-SOFI-I (ADAS-I) (410325)
15) Chua Hock Gee 1,350,000 0.64

Pledged Securities Account for Chee Chik Keng
17) Tan Ah Loy @ Tan May Ling 1,300,000 0.62
18) HSBC Nominees (Tempatan) Sdn Bhd 1,180,000 0.56

HSBC (M) Trustee Bhd for Pertubuhan Keselamatan Sosial (UOB AMM6939-406)
19) CIMSEC Nominees (Tempatan) Sdn Bhd 1,110,000 0.53

CIMB Bank for Cheong Yee Kiong (MY0099)

Pledged Securities Account for Chee Chik Eng (Margin)
21) Kumpulan Wang Simpanan Guru-Guru 1,057,900 0.50

Pledged Securities Account for Jaganath Derek Steven Sabapathy
23) UOB Kay Hian Nominees (Asing) Sdn Bhd 1,011,000 0.48
Exempt AN for UOB Kay Hian Pte Ltd (A/C Clients)

Pledged Securities Account for Cheng Kien Wing (Margin)
25) Alliancegroup Nominees (Tempatan) Sdn Bhd 900,000 0.43

Pledged Securities Account for Jaganath Derek Steven Sabapathy (7003163)
26) Maybank Nominees (Tempatan) Sdn Bhd 896,000 0.43

Maybank Trustees Berhad for Apex Dana Al-Faiz-I (ADAF-I) (410324)

AS AT 4 APRIL 2017 (Contd)
THIRTY (30) LARGEST SHAREHOLDERS BASED ON THE RECORD OF DEPOSITORS (Contd)
Name
Shareholding %
27) Alliancegrou-p Nominees (Tempatan) Sdn Bhd 890,000 0.42

Pledged Securities Account for Cheong Yee Kiong (8103751)
28) Lee Kim Song 850,000 0.41
29) Tan Hock Loo 700,000 0.33
30) Citigroup Nominees (Asing) Sdn Bhd 698,900 0.33

Exempt AN for Citibank N.A Singapore (UBP SG1)
SUBSTANTIAL SHAREHOLDERS BASED ON THE REGISTER OF SUBSTANTIAL SHAREHOLDERS
Direct Interest Indirect Interest

No. of Shares % No. of Shares %
Dato Sri Ng Ah Chai 119,218,055 56.77 - -

LIST OF PROPERTIES
Approximate
age of Net book Balance
building value Acquisition of lease
Location Tenure Land area Description (Years) RM000 date by Year
PAHANG
Lot 73, Gebeng Lease 653,670 Warehouse & 1 13,334 26.10.1999 32

Industrial Area expiring sq.ft. Industrial land
26080 Kuantan 18.08.2048
Pahang Darul Makmur
Lot 74, Gebeng Lease 1,254,528 Chipboard 14-22 36,275 24.08.1995 81

Industrial Area expiring sq.ft. factory
26080 Kuantan 22.02.2097 &
Pahang Darul Makmur Industrial Land
Lot 3, Kawasan Lease 2,178,000 Chipboard 12 73,358 05.12.2004 88

Perindustrian expiring sq. ft. factory
Kechau Tui 2104 &
27100 Lipis Industrial Land
Pahang Darul Makmur
Lot 27, Kawasan Lease 158,253 Industrial land 213 20.12.2006 89

Perindustrian expiring sq.ft.
Kechau Tui, Lipis 20.12.2105
Pahang Darul Makmur

Pahang Darul Makmur

Pahang Darul Makmur

Pahang Darul Makmur

NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Forty-Fourth Annual General Meeting (44th AGM) of Mieco Chipboard Berhad
(MIECO or Company) will be held at Grand Ballroom, Level 3, Hotel Bangi-Putrajaya, Off Persiaran Bandar, 43650
Bandar Baru Bangi, Selangor on Wednesday, 31 May 2017 at 10.00 a.m.
AGENDA
1. To receive the Audited Financial Statements for the financial year ended
31 December 2016 and the Reports of the Directors and Auditors thereon.
As Ordinary Resolution
2. To approve the following payments to Directors:-
(i) Directors fees of RM158,459.02 for the financial year ended Ordinary Resolution 1
31 December 2016. (Please refer to Explanatory
Note 1)
(ii) Payment of Directors benefits to the Non-Executive Directors up to Ordinary Resolution 2

an amount of RM60,000.00 from 1 January 2017 until the next Annual (Please refer to Explanatory
General Meeting of the Company. Note 1)
3. To re-elect the following Directors retiring in accordance with the Article

88 of the Companys Articles of Association and who, being eligible, offer
themselves for re-election:
(i) Y.A.M. Tengku Puteri Seri Kemala Pahang Tengku Aishah Binti Sultan Haji Ordinary Resolution 3
Ahmad Shah
(ii) Dato Sri Ng Ah Chai Ordinary Resolution 4
(iii) Mr. Cheam Tow Yong Ordinary Resolution 5
(iv) Dato Abdul Rashid Bin Mat Amin Ordinary Resolution 6
4. To re-appoint Messrs Deloitte PLT as auditors of the Company and to authorise Ordinary Resolution 7
the Directors to fix their remuneration.
AS SPECIAL BUSINESS
To consider and, if thought fit, to pass the following Ordinary Resolutions with or
without modifications:
5. Proposed New Shareholders Mandate for Recurrent Related Party

Transactions of a Revenue or Trading Nature
THAT, subject to the provisions of the Listing Requirements of Bursa Malaysia

Securities Berhad, approval be and is hereby given to the subsidiary of MIECO,
namely Mieco Manufacturing Sdn. Bhd. to enter into recurrent related party
transactions of a revenue or trading nature as set out in Part A of the Circular
to Shareholders dated 28 April 2017, provided that such transactions are
undertaken in the ordinary course of business, on arms length basis, on normal
commercial terms which are not more favourable to the related parties than
those generally available to the public and are not detrimental to the minority
shareholders;

(Contd)
THAT such approval shall continue to be in force until the earlier of:
(i) the conclusion of the next Annual General Meeting of the Company at
which time it will lapse unless the authority is renewed by a resolution
passed at the next Annual General Meeting;
(ii) the expiration of the period within which the next Annual General Meeting
is to be held pursuant to Section 340(2) of the Companies Act 2016 (the
Act) (but shall not extend to such extension as may be allowed pursuant
to Section 340(4) of the Act); or
(iii) such approval is revoked or varied by resolution passed by shareholders

in a general meeting before the next Annual General Meeting;
AND THAT the Directors of the Company be authorised to complete and do (Resolution 8)
all such acts and things (including executing all such documents as may be (Please refer to Explanatory
required) as they may consider expedient or necessary to give effect to this Note 2)
Ordinary Resolution.
6. Proposed Authority To Buy-Back Its Own Shares By The Company
THAT, subject always to the Companies Act 2016, the provisions of the
Memorandum and Articles of Association of the Company, the Listing
Requirements of Bursa Malaysia Securities Berhad (Bursa Securities) and
all other applicable laws, guidelines, rules and regulations, the Company be
and is hereby authorised to purchase such amount of ordinary shares in the
Company as may be determined by the Directors of the Company from time
to time through Bursa Securities as the Directors may deem t and expedient
in the interest of the Company, provided that:
(i) the aggregate number of shares purchased does not exceed 10% of
the total number of issued shares of the Company as quoted on Bursa
Securities as at the point of purchase(s);
(ii) the maximum fund to be allocated by the Company for the purpose of
purchasing the shares shall not exceed the aggregate of the retained prots
and share premium account of the Company based on the latest Audited
Financial Statements and/or the latest management accounts of the
Company (where applicable) available at the time of the purchase(s); and
(iii) the Directors of the Company may decide either to retain the shares
purchased as treasury shares or cancel the shares or retain part of the
shares so purchased as treasury shares and cancel the remainder or to
resell the shares or distribute the shares as dividends;
THAT the authority conferred by this Resolution shall commence immediately

and shall continue to be in force until the conclusion of the next Annual General
Meeting of the Company following the passing of this Ordinary Resolution,
unless earlier revoked or varied by an ordinary resolution of the shareholders
of the Company in a general meeting;
AND THAT authority be and is hereby given to the Directors of the Company (Resolution 9)
to act and take all such steps and do all things as are necessary or expedient to (Please refer to Explanatory
implement, nalise and give full effect to the aforesaid purchase. Note 3)

(Contd)
7. Authority to Issue Shares
THAT, subject always to the Companies Act 2016, the Articles of Association (Resolution 10)
of the Company and the approvals of the relevant governmental/regulatory (Please refer to Explanatory
authorities, if applicable, the Directors be and are hereby empowered, pursuant Note 4)
to Section 75 and Section 76 of the Companies Act 2016, to issue shares in the
Company from time to time and upon such terms and conditions and for such
purposes as the Directors may in their absolute discretion deem t provided
that the aggregate number of shares issued pursuant to this Resolution does
not exceed 10% of the total number of issued shares of the Company for the
time being and that the Directors be and are also empowered to obtain the
approval for the listing of and quotation for the additional shares so issued
on Bursa Malaysia Securities Berhad and that such authority shall continue
to be in force until the conclusion of the next Annual General Meeting of the
Company.
8. To transact any other business of which due notice shall have been given.
By Order of the Board
NG GEOK LIAN (LS 07155)

COMPANY SECRETARY
KUALA LUMPUR
28 APRIL 2017
NOTES:
1. A proxy may but need not be a member of the Company and a member shall be entitled to appoint a maximum of two (2)
proxies to attend and vote at the same meeting. Where a member appoints more than one (1) proxy, the appointment shall be
invalid unless he specifies the proportions of his shareholding to be represented by each proxy.
2. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act,
1991 (SICDA), it may appoint up to two (2) proxies in respect of each securities account it holds with ordinary shares of the
Company standing to the credit of the said securities account.
3. Where a Member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple
beneficial owner in one (1) securities account (omnibus account), there is no limit to the number of proxies which the exempt
authorised nominee may appoint in respect of each omnibus account its holds. An exempt authorised nominee refers to an
authorised nominee defined under the Securities Industry (Central Depositories) Act 1991 (SICDA) which is exempted from
compliance with the provisions of subsection 25A(1) of SICDA.
4. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in
writing or, if the appointor is a corporation, the Form of Proxy must be executed under the corporations seal or under the hand
of an officer or attorney duly authorised.
5. For a proxy to be valid, the Form of Proxy duly completed must be deposited at the office of the Share Registrar, Metra
Management Sdn. Bhd. at 30.02, 30th Floor, Menara Multi-Purpose, Capital Square, No. 8, Jalan Munshi Abdullah, 50100 Kuala
Lumpur not less than forty-eight (48) hours before the time for holding the meeting or at any adjournment thereof.
6. For purpose of determining who shall be entitled to attend this meeting, the Company shall be requesting Bursa Malaysia
Depository Sdn. Bhd. to make available to the Company a Record of Depositors (ROD) as at 23 May 2017 and only a Depositor
whose name appears on such ROD shall be entitled to attend this meeting or appoint proxy to attend and/or vote in his/her
behalf.

(Contd)
Explanatory Notes on Ordinary Business:
1. The Ordinary Resolution 1 & 2, Section 230(1) of the Companies Act, 2016 provides amongst others, that the fees of the Directors
and any benefits payable to the Directors of a listed company shall be approved at a general meeting.
In this respect, the Board wishes to seek shareholders approval for the following payments to Directors at the 44th AGM in two
(2) separate resolutions as below:
Resolution 1 on payment of Directors Fees totalling RM158,459.02 in respect of the financial year ended 31 December
2016; and
Resolution 2 on the Directors benefits payable. The total estimated amount of Directors benets payable is calculated
based on the number of scheduled Boards and Board Committees meetings for the current nancial year ending 31
December 2017 until the next Annual General Meeting and other benets. This authority, unless revoked or varied by the
Company in a general meeting will expire at the conclusion of the next Annual General Meeting of the Company.
Explanatory Notes on Special Business:
2. The Ordinary Resolution 8, if passed, will allow the subsidiary of MIECO, namely Mieco Manufacturing Sdn. Bhd. (MMSB) to
enter into recurrent related party transactions of a revenue or trading nature with those related parties as set out in Section 2.3
of the Circular to Shareholders dated 28 April 2017, which are necessary for the day-to-day operations of MMSB, subject to the
transactions being carried out in the ordinary course of business of MMSB and on normal commercial terms which are generally
available to the public and not detrimental to the minority shareholders of the Company.
For further information on this resolution, please refer to the Part A of the Circular to Shareholders dated 28 April 2017 which is
despatched together with the Annual Report 2016.
3. The Ordinary Resolution 9, if passed will allow the Company to purchase its own shares. The total number of shares purchased
shall not exceed 10% of the total number of issued shares of the Company. This authority will, unless revoked or varied by the
Company in general meeting, expire at the next Annual General Meeting of the Company.
For further information on this resolution, please refer to the Part B of the Circular to Shareholders dated 28 April 2017 which is
despatched together with the Annual Report 2016.
4. The Ordinary Resolution 10, if passed, will give the Directors of the Company authority to issue shares in the Company up to
an amount not exceeding 10% of the total number of issued shares/total number of voting shares of the Company for the time
being for such purposes as the Directors consider would be in the best interest of the Company. This authority, unless revoked
or varied by the shareholders of the Company in general meeting will expire at the conclusion of the next Annual General
Meeting. This General Mandate will provide flexibility to the Company for any possible fund raising activities, including but not
limited to further placing of shares, for purpose of funding future investment project(s), working capital and/or acquisitions.
Statement Accompanying
Notice of Annual General Meeting
(Pursuant to Paragraph 8.27(2) of the Listing Requirements of Bursa Malaysia Securities Berhad)
1. No individual is standing for election as a Director at the forthcoming Forty-Fourth Annual General Meeting of the
Company.

Form of Proxy
CDS ACCOUNT NO.
- -
Mieco Chipboard Berhad
I/We _______________________________________________________________ Tel No. ________________________________

(FULL NAME IN BLOCK CAPITALS)
NRIC No./Company No. __________________________________________ of ________________________________________

(ADDRESS)
___________________________________________________________________________________________ being a Member
of MIECO CHIPBOARD BERHAD, hereby appoint _____________________________________________________________

NRIC No. _________________________________ of ______________________________________________________________

(ADDRESS)
or failing him, ______________________________________________________ NRIC No. ______________________________

of ___________________________________________________________________________________________ or failing him,

(ADDRESS)
the CHAIRMAN OF THE MEETING as my/our proxy to vote on my/our behalf at the Forty-Fourth Annual General Meeting
of the Company to be held at Grand Ballroom, Level 3, Hotel Bangi-Putrajaya, Off Persiaran Bandar, 43650 Bandar Baru
Bangi, Selangor on Wednesday, 31 May 2017 at 10.00 a.m. and at any adjournment thereof.
No. Agenda Ordinary FOR AGAINST

Resolutions
1 To approve the payment of Directors fees of RM158,459.02 1
for the financial year ended 31 December 2016.
2 To approve the payment of Directors benefits to the Non- 2
Executive Directors up to an amount of RM60,000.00 from 1
January 2017 until the next Annual General Meeting of the
Company.
3 To re-elect Y.A.M. Tengku Puteri Seri Kemala Pahang Tengku 3
Aishah Binti Sultan Haji Ahmad Shah who retires by rotation
in accordance with Article 88 of the Companys Articles of
Association and being eligible, offers herself for re-election.
4 To re-elect Dato Sri Ng Ah Chai who retires by rotation in 4
accordance with Article 88 of the Companys Articles of
Association and being eligible, offers himself for re-election.
5 To re-elect Mr. Cheam Tow Yong who retires by rotation 5
in accordance with Article 88 of the Companys Articles of
Association and being eligible, offers himself for re-election.
6 To re-elect Dato Abdul Rashid Bin Mat Amin who retires 6
by rotation in accordance with Article 88 of the Companys
Articles of Association and being eligible, offers himself for
re-election.
7 To re-appoint Messrs. Deloitte PLT as Auditors for the ensuing 7
year and to authorise the Board of Directors to fix their
remuneration.
8 Proposed New Shareholders Mandate for Recurrent Related 8
Party Transactions of a Revenue or Trading Nature
9 Proposed Authority to Buy-Back Its Own Shares By The 9
Company
10 Authority to Issue Shares 10
Please indicate with an X how you wish your vote to be cast. If no specific direction as to voting is given, the proxy will
vote or abstain at his discretion.
For appointment of two (2) proxies,
percentage of shareholdings to be
As witness my/our hand(s) this _______ day of ______________, 2017.
represented by the two (2) proxies
No. Of Shares Percentage
Proxy 1
Number Of Shares Held Proxy 2

______________________________
Signature Of Member Total 100
Fold this flap for sealing
Then fold here
AFFIX
STAMP
The Share Registrar

Metra Management Sdn. Bhd.
30.02, 30th Floor,
Menara Multi-Purpose, Capital Square
No. 8, Jalan Munshi Abdullah
50100 Kuala Lumpur, Malaysia
1st fold here

Notes:
1. A proxy may but need not be a member of the Company and a member shall be entitled to appoint a maximum of two (2) proxies to
attend and vote at the same meeting. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless
he specifies the proportions of his shareholding to be represented by each proxy.
2. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act,
1991 (SICDA), it may appoint up to two (2) proxies in respect of each securities account it holds with ordinary shares of the
Company standing to the credit of the said securities account.
3. Where a Member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple
beneficial owner in one (1) securities account (omnibus account), there is no limit to the number of proxies which the exempt
authorised nominee may appoint in respect of each omnibus account its holds. An exempt authorised nominee refers to an
authorised nominee defined under the Securities Industry (Central Depositories) Act 1991 (SICDA) which is exempted from
compliance with the provisions of subsection 25A(1) of SICDA.
4. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing
or, if the appointor is a corporation, the Form of Proxy must be executed under the corporations seal or under the hand of an officer
or attorney duly authorised.
5. For a proxy to be valid, the Form of Proxy duly completed must be deposited at the office of the Share Registrar, Metra Management
Sdn. Bhd. at 30.02, 30th Floor, Menara Multi-Purpose, Capital Square, No. 8, Jalan Munshi Abdullah, 50100 Kuala Lumpur not less
than forty-eight (48) hours before the time for holding the meeting or at any adjournment thereof.
6. For purpose of determining who shall be entitled to attend this meeting, the Company shall be requesting Bursa Malaysia Depository
Sdn. Bhd. to make available to the Company a Record of Depositors (ROD) as at 23 May 2017 and only a Depositor whose name
appears on such ROD shall be entitled to attend this meeting or appoint proxy to attend and/or vote in his/her behalf.

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ANNUAL REPORT 2016

Group Corporate Structure 2

Key Senior Management Profiles 6

Group Managing Directors 7

Corporate Social Responsibility 11

Corporate Governance Statement 19

Audit Committee Report 29

Statement On Risk Management 32

Statement Of Directors Responsibility 35

Analysis Of Shareholdings 113

List Of Properties 116

Notice Of Annual General Meeting 117

Statement Accompanying Notice of 120

2 MIECO CHIPBOARD BERHAD ANNUAL REPORT 2016

BOARD OF DIRECTORS SECRETARY

Y.A.M. Tengku Puteri Seri Kemala Pahang Ng Geok Lian

Dato Sri Ng Ah Chai REGISTRARS

AUDIT COMMITTEE Messrs Deloitte PLT

NOMINATION COMMITTEE BANKERS

BURSA MALAYSIA STOCK NUMBER

No. 1, Block C, Jalan Indah 2/6 REUTERS CODE

MIECO CHIPBOARD BERHAD ANNUAL REPORT 2016 3

Currently, Dato Sri Ng is the Executive Chairman and

4 MIECO CHIPBOARD BERHAD ANNUAL REPORT 2016

1) Save as disclosed above, none of the Directors has

2) None of the Directors has:

MIECO CHIPBOARD BERHAD ANNUAL REPORT 2016 5

6 MIECO CHIPBOARD BERHAD ANNUAL REPORT 2016

Overview on Business Operations

MIECO CHIPBOARD BERHAD ANNUAL REPORT 2016 7

Risks to the Business

8 MIECO CHIPBOARD BERHAD ANNUAL REPORT 2016

Outlook and Prospects

MIECO CHIPBOARD BERHAD ANNUAL REPORT 2016 9

Dato Sri Ng Ah Chai

10 MIECO CHIPBOARD BERHAD ANNUAL REPORT 2016

ENGAGING WITH OUR COMMUNITIES IN 2016

Used Garden Chairs were repainted and distributed to selected schools.

Top left: Pusat Asuhan Pasti Balok Makmor.

MIECO CHIPBOARD BERHAD ANNUAL REPORT 2016 11

MIECO also donated to SK Kechor Tui,

Cabinets installed in the rooms Handover of donated cabinets to

Green The Earth Programme on 27 Nov 2016 at Tapak Semaian Kemunting,

12 MIECO CHIPBOARD BERHAD ANNUAL REPORT 2016

MIECO Lipis Team, led by the Human Resource

Gardening & Housekeeping activities

In conjunction with Hari Raya 2016, MIECO Sports Club

One of Tazkirah (Motivation) Session organised

MIECO CHIPBOARD BERHAD ANNUAL REPORT 2016 13

Health Screening programme was arranged by Human Resource Department at Gebeng

Health screening conducted by Klinik Kesihatan Balok at Gebeng Plant

Mieco Gebeng Team visited employees who on seriously ill

14 MIECO CHIPBOARD BERHAD ANNUAL REPORT 2016

MIECO Management has distributed RM50 cash voucher to all

During year end of 2016, the Management has provided financial

An employee who collected her schooling kids financial assistance at HR office

Mieco staffs who participated in bowling

MARKETPLACE MIECOs growth strategy is to bring in new customers.